By Rachel Dovey.
Since President Trump unveiled his $1.5 trillion infrastructure proposal Monday, state and city officials — and the organizations representing them — have scrambled to make sense of the plan’s central funding switch.
That’s because the $1.5 trillion is really only $200 million in direct federal spending, the AP reports. The administration proposes using those direct funds to leverage local and state tax dollars and public-private partnerships. It’s still offering an 80-20 funding split to localities (on road projects, for example) — but the 80 and 20 are switched.
The Huffington Post reports:
The administration’s proposal would theoretically spur additional investment in infrastructure by sharply reducing federal cost-sharing for projects to no more than 20 percent of the costs, down from the traditional 80 percent. The massive reduction in federal dollars would place a greater onus on state and local officials to find revenue to fund the construction of new projects ― which in many cases would likely mean allowing more tolls or usage fees to create revenue streams to lure in private investors.
The paper speculates that that arrangement could be particularly hard on rural communities, where sparser populations could have trouble coming up with enough in local taxes or attracting investors (and those small cities may not have an airport to sell, to make up the difference). But according to Wired, the proposal actually throws a hefty bone to rural America — $50 billion in no-strings-attached funding for communities smaller than 50,000.