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Global Trade Magazine Reports on Transportation Labor Leaders’ Commitment to Seeking Federal Funding for Infrastructure

Transportation Unions Roll Out Strategies to Move Infrastructure Package

As reported by Peter Buxbaum in Global Trade Magazine

 

Transportation labor leaders have laid out a strategy focused on shaping President Donald Trump’s $1 trillion transportation infrastructure package and tackling challenges faced by transportation workers.

But the labor leaders, along with Democrats in Congress who support the infrastructure package, differ with the administration’s thoughts on how to finance the projects. The White House envisions a public-private partnership in which participating private companies would receive tax breaks and equity participation in the projects. The Democrats and labor prefer direct federal spending on the initiative.

“We committed today to rally behind a $1 trillion infrastructure package that doesn’t rely mostly on tax incentives but instead includes an infusion of billions in new federal funding and embraces high labor standards,” said Edward Wytkind, president of the Transportation Trades Department, AFL-CIO (TTD). “We cannot toll our way to modernizing and expanding our transportation system and creating millions of new jobs.”

TTD hosted Rep. Jeff Denham, a Republican of California, for a discussion on the pressing issues affecting America’s transportation workers, including the need to advance a robust infrastructure package. Denham is a senior member of the House Committee on Transportation and Infrastructure and chairman of the Subcommittee on Railroads, Pipelines, and Hazardous Materials.

“Our nation’s transportation system, and the men and women who build, operate and maintain it, play a crucial role in keeping our economy strong,” Denham said. “I look forward to working with transportation labor leaders to advance strategic infrastructure investments that will rebuild our vast transportation network and, in the process, drive middle-class job creation in California and throughout the nation.”

According to the transportation labor leaders, any transportation infrastructure plan advanced by the president and Congress must include a significant infusion of new federal funds.

The details of the president’s plan are far from clear, although Trump has said he expected both public and private funding. Some reports have suggested the administration will put forward an infrastructure program that relies heavily on tax credits for private investors to finance projects through public-private partnerships.

Public-private partnerships usually connotes a model that is financed through private equity – a set of private investors that get a taxpayer subsidized ownership stake in the private infrastructure project’s profits. The problem opponents of such a scheme have is that equity capital is more expensive than traditional public funding because private partners can demand a financial return far above what traditional public financing currently requires. Also, to meet their financial return, public-private partnerships require a stable stream of revenue, collected through either tolls or fixed payments by the government. Detractors say that generating revenue for tolls and profit is not feasible for most of infrastructure projects being contemplated, such as infrastructure replacement, maintenance and public transportation.

For all the noise the being generated about infrastructure from all sides, neither the administration nor Congress has yet to put forward a program for consideration, and it’s not clear when this might be done.

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