President Trump's infrastructure plan calls for $200 billion in new spending, a speedy permitting process and a rural investment fund, but won't give any special preference to the Gateway tunnel project - a top priority for NY and New Jersey.
Under the proposals, states and private investors would put up the remaining US$1.3 trillion. The White House did specify that they would reduce spending on transit funding, which includes federal funding for Amtrak.
If a local government is unable to raise the necessary funds for a much-needed infrastructure project, they would still have access to existing state revolving funds and the Highway Trust Fund but would likely be unable to participate in this new incentive program.
"Taxes are one of the ways that state and local governments could raise revenues, but are certainly not the only ways", another senior administration official told CBS News.
Schumer said he's anxious Trump officials will say, 'Let the private sector do it.' " He added, "That will result in tolls - Trump Tolls, I would call them - across the country in highways that we now are able not to have tolls on".
"I do have doubts that it's going to generate the infrastructure investment with local funds", said Pagano, citing his annual survey, which found last summer that municipal general funds still haven't rebounded to their 2006 level before the Great Recession hit.
Under Trump's plan, NY and New Jersey would have to turn to local government and private sources of funding after Trump administration officials past year rejected claims that the Obama administration committed to use federal funds for half of Gateway's cost. Through a platform called, "one agency, one decision", they would create a lead federal organization to coordinate and work with other permitting agencies and come to a final decision on all projects within two years.
"The way that we get to $1.5 trillion is we could be putting 10 percent or 20 percent in terms of the cost of that project". And how do we know they truly care about them? Local government officials will be able to apply for federal infrastructure grants and matching funds so long as they can provide a large portion of the funding themselves.
Under Trump's plan, the federal government would spend $100 billion to match state and local funds for up to 20 percent of the cost of projects; offer $20 billion in loans; send $50 billion to states for rural work; set aside $20 billion for nonrepair projects that focus on modernization; and use $10 billion on capital financing.
"Not only are we not walking away from the federal responsibility, we're taking even more responsibility to ensure that we get infrastructure funding and permitting on a sustainable track for generations", the senior administration official said.
"Infrastructure is obviously a critical component to the functioning of our economy, a lot of American success is a result of the quality of the infrastructure we have had historically", said a senior White House official. That levy has been 18.4 cents a gallon since 1993, and inflation as well as rising vehicle fuel efficiency have reduced its usefulness in raising enough money to keep pace with fix needs. The American Society of Civil Engineers said previous year that the USA would need to invest $4.59 trillion by 2025 to improve the country's infrastructure.
The White House says the Gateway project may have two avenues for funding under the Trump plan.
A second major piece of the plan involves reforms to the federal permitting process, aimed at cutting the amount of time it takes for infrastructure projects to gain approval. The current permitting structure is overly concerned with preventing litigation and not enough on outcomes, the official said. The proposal, according to a senior administration official, will remove obstacles for people who are looking to go into trades, change licensing requirements so workers can more easily move from state to state and expand apprenticeships.
The Democratic proposal did not identify any specific plan to pay for improvements, but aides said they were committed to finding a way. The president on Wednesday will be hosting a bipartisan group of members of Congress to discuss the plan.
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