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Five Infrastructure Proposals from Obama’s Budget

Five Infrastructure Proposals from Obama’s Budget

by Geoffrey Corey | February 3, 2015

Yesterday, President Barack Obama released a $4 trillion budget plan that attracted attention for its ambitious proposals, but was widely condemned by Republican leaders in Congress. While this exact budget is virtually certain not to be enacted– particularly at these funding levels – this is the blueprint Congress will work from as a final budget is determined.

The budget proposed yesterday is unique in its clear focus on the need to upgrade America’s infrastructure, and the fact that there hasn’t been much criticism of that section is a good sign Congressional Republicans are interested in working with the President on these issues. These negotiations will play out over most of 2015.

While some of these proposals are more likely to be approved than others, here are five proposals those in the design-build industry should know about:

1. A 6-year funding plan for surface transportation projects

To replace a temporary extension to surface transportation funding that expires in May, the President has proposed spending $478 billion over six years on surface transportation. To pay for it, he has proposed a one-time 14 percent tax on profits U.S. corporations are holding overseas. The tax is much lower than the top rate of the current corporate tax in order to encourage companies to re-patriate those funds. Again, the likelihood of this exact proposal becoming law is low, but it is the initial offer from the President. Now Congress will likely make a counter-offer, and the final law passed will be somewhere in the middle.

2. Permanent authorization of the successful TIGER grant program

Included in the proposed $478 billion surface transportation funding bill, this proposal is welcome news to those in the design-build industry who have seen TIGER grants used to great effect on design-build projects. The TIGER grant program is widely acclaimed, so it is exciting to think it may become a permanent part of transportation funding.

3. Consolidated federal permitting process

The budget proposes a new Interagency Infrastructure Permitting Improvement Center be housed at the Department of Transportation (DOT) to streamline the permitting process for infrastructure projects. Also proposed is an expanded, publicly available Permitting Dashboard so citizens can more easily track project schedules and metrics. Even without Congressional approval the administration has already set up an interim interagency team to make small changes, such as moving from separate reviews, to one synchronized review (for example, the Coast Guard, Army Corps of Engineers and the DOT conducting a single environmental analysis on some projects that satisfies all three agencies’ requirements).

4. Support for private sector infrastructure investment

As part of the proposed Build America Investment Initiative (BAII), investment centers would be established to help states and municipalities leverage government resources to encourage innovative private investments in infrastructure, whether through a public-private partnership (P3) or some other means. The budget proposal also includes a new federally-funded America Fast Forward Bond program to provide an optional taxable bond alternative to traditional tax-exempt bonds. In January, President Obama also floated the idea of offering special municipal bonds specifically for P3s.

5. Upgrades to federally-owned properties

The budget also included $2.5 billion for the General Services Administration to invest in improving and consolidating federally-owned facilities. An additional $860 million budget was proposed for the National Parks Service to use over 10 years to upgrade their non-transportation assets. Again, these numbers are likely to change in the final budget, but by including these items in their budget summary document the administration has signaled they think these upgrades are important.

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