Trump walks back support of private spending on public infrastructure
President Donald Trump told a group of lawmakers Tuesday that private financing of public infrastructure isn't likely to work and that public-private partnerships (P3s) are "more trouble than they're worth," according to The Wall Street Journal.
During the 2016 presidential campaign and since taking office, the White House has touted the benefits of private investment as a way to carry out Trump's $1 trillion infrastructure spending program. Private investment in infrastructure is a key pillar of their 2018 budget proposal.
Trump's move could see a shift toward a policy of increased direct federal spending on infrastructure, according to The Washington Post. The strategy falls in line with what Democrats have proposed but it is sure to draw the ire of Republicans, who have vowed to block any stimulus-like public works spending program.
Wherever the president and his administration land on P3s, the financing and delivery mechanism has proven to be, with few exceptions, an efficient way for state and local governments to stretch their money and tackle more capital projects than they could if they had to rely completely on their own funds and expertise.
Even so, many states are preparing to pay for massive infrastructure initiatives themselves. Earlier this year, California lawmakers authorized a $52 billion plan to finance and execute road, bridge and public transportation upgrades and repairs. To support the plan, the state raised its gas tax by 12 cents per gallon and instituted new annual vehicle license fees.
New York officials have come out in support of P3s and are relying on them to deliver major airport terminal projects at LaGuardia Airport and John F. Kennedy International Airport, both in New York City. The private partner for the LaGuardia project, LaGuardia Gateway Partners (LGP), helped finance the $4 billion Central Terminal B overhaul and is now in the process of building it. LGP also designed the terminal and will manage it when it is complete. LGP says the entire project is worth $5.1 billion, which makes it the largest P3 in U.S. aviation history.
The Port Authority of New York and New Jersey intends to move forward with a $10 billion overhaul of JFK Airport under a P3. Officials said they're looking at a potential $7 billion deal for a private consortium. The state recently selected a private-sector team led by Mott MacDonald to develop a master plan for the project.
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