The lack of clarity on the federal funding role is one of the more important factors affecting the state and local infrastructure market. And while the proposed policy changes proposed by the Trump administration would be welcome by private investors, there is a risk that such a policy shift alone might not immediately accelerate the overall pace of infrastructure activity over the next four years.
So says Joe Aiello, Partner at Meridiam Infrastructure, who also chairs the Fiscal and Management Control Board of the Massachusetts Bay Transportation Authority in Boston.
A national consensus on the federal role in funding infrastructure was set at the start of the Interstate highway program in 1955 and remained steady until 2005, when the “Bridge to Nowhere” changed everything. The waffling since then has confused spending decisions by states as their transportation bureaucracies inevitably wait to see whether the federal grants pipeline will sustain them.
If the White House gets its way, Aiello worries about the time lag on implementation as all state and local governments adjust to the Trump program. Perhaps a way forward, he says, might be to consider a temporary gas tax increase that could spur traditional work and put industry and employees immediately to work.