Steve Burns
WMAL.com
WASHINGTON – (WMAL) It’s been the one shred of hope expressed by countless Democrats in the wake of Donald Trump’s upset victory: the potential for a big investment in American infrastructure, something both parties agreed is desperately needed. But as D.C.-area transportation officials dig deeper into Trump’s proposed details on how to pay for the improvements, there may be more questions than answers.
“It’ll be interesting to see where the money comes from,” D.C. DOT Director Leif Dormsjo told a recent transportation forum. “These things aren’t going to pay for themselves. There’s either going to be an impact on tax revenue coming in, or there’s going to be a new source identified.”
Trump’s plan hinges heavily on incentivizing the private sector to invest in public projects through tax breaks. It would likely lead to a big expansion of the P3 concept – a Public-Private Partnership, in which a private firm joins the government in assuming risk, funding, building, and operating a piece of infrastructure.
“We’ve been involved with P3’s since 1995, recognized as a leader and done some good and some we could’ve done better,” Virginia Transportation Secretary Aubrey Layne said. “I think there’s a learning curve and an associated skill set that needs to be developed in these states to take advantage of these innovating financing techniques.”
The P3 has become popular in the D.C. area, seen in roads like the Dulles Greenway, tolling on the Virginia side of the Beltway, and in future projects like the Purple Line, one of the first transit-related P3’s in the country.
“Some of the thinking is really, I think, informed by private industry financing,” Dormsjo said. “There’s kind of a misapplication of some principles to a public sector setting.”
P3’s often rely on user fees to generate revenue and profit for private investors, but, Dormsjo said, there is a limit to what can be tolled.
“Most projects don’t have a source of revenue,” he said. “They don’t have user fees. There’s a limit to how many toll facilities we can advance.”
Accountability should also be an important part of any robust transportation plan, Layne said.
“I would hope that there would be some type of output-based measures, instead of just allocating money around,” Layne said. “Otherwise, I think we’re going to see what happened in the last stimulus. A lot of paving gets done but no real big projects.”
Transit advocates worry P3’s will only benefit projects the private sector sees as profitable, but leave behind less glitzy opportunities that may be just as important, like repairing existing infrastructure, fixing water and sewer issues, or renovating aging transit systems.
“I’m concerned about this privatization tail wagging the transportation dog here,” Coalition for Smarter Growth Executive Director Stewart Schwartz told WMAL. “That is sort of taking over our transportation systems, rather than a focus on the right priorities. Fixing existing infrastructure has to be the first priority.”
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