Print

Why Trump Needs to be Bolder on His Infrastructure Plan

Crain's Chicago Business

The first week of June was supposed to be infrastructure week in D.C. President Donald Trump was finally going to roll out some details of his plan to spend $1 trillion rebuilding roads, airports, bridges and waterways around the country, with a decent chance that ribbon-cutting-loving Democrats would work with him.

Ha ha ha! Even though Trump was overshadowed by the James Comey fest in the Senate, he produced not a plan but a sketch, with exactly one detail, which came under immediate fire. Just as bad, signs grew that Democratic willingness to seek common ground on this issue has melted away with Trump's standing in the polls.

That is beyond unfortunate for us. Having functioning airports, roads and railroads is critical to the economic health of the Chicago region, which in many ways is the nation's transportation capital. Stalling action on infrastructure will only hurt this area's efforts to increase jobs and prosperity.

In a couple of statements and a speech, Trump revealed one detail—he wants to privatize the country's air traffic control system—and indicated that he'd like to dangle $200 million in public funds to lure four times as much in private capital.

There's merit to the public-private partnership idea. As Toronto Mayor John Tory suggested in an interview here while attending a Chicago Council on Global Affairs event, private investors can impose spending discipline on pols who, left to their own devices, would never self-impose.

But as I suggested in a column a while ago, private interests are not going to get involved unless there's a revenue stream that can be tapped for a profit. That may work on toll roads and airports that arguably can pass on costs to their users. But for something like a rapid transit line or a flood control dam, forget it. If running them were profitable, the private sector would have ponied up long ago.

Even in those cases, problems exist. A few years ago Indiana privatized part of its tollway operation, netting $3.8 billion that it used to pay for other transportation needs. But traffic projections were too high, in part because rising tolls steered motorists to free routes, and the operator ended up going bankrupt. Given that experience, even Indiana conservatives just sucked it up and enacted a 10-cent-a-gallon gas tax to pay for roadwork.

Yes, you read that right: Indiana just raised taxes. And Illinois would likely have to do so, too, because Trump has made clear his desire to cut the federal share of spending projects.

Still, even Trump's plan requires $200 million in federal revenue. But for a good decade now, Congress has been most unwilling to enact a specific revenue source for transportation. Instead, it has scrounged up some money because it's been unwilling to do what Indiana did. If Trump got behind raising the federal motor fuel tax, it might happen. But he's not.

Meanwhile, privatizing air traffic control may be just as unpopular. U.S. Rep. Dan Lipinski—the Chicago Democrat on the House Transportation Committee—is solidly against it. Among his objections: letting a private company run the show might curb Congress' ability to impose noise limits on airports.

Lipinski and other Democrats also seem to be moving against the broader concept of public-private partnerships. "There's a place for user fees," he says. "But we already have one: the gasoline tax. Why do we need to give private companies a profit?"

There you have it. The president has a half-baked plan, one that's too narrow and lacks a dependable revenue source. Democrats have a revenue source or two. If a gas tax won't fly, Lipinski suggests giving transit a cut of proceeds from taxing repatriated corporate profits now held overseas. But that looks unlikely, too.

In other words, on this critical issue, Springfield has moved to Washington. Isn't that just wonderful?