Study: Urban areas more likely to benefit under Trump-style infrastructure plan

Study: Urban areas more likely to benefit under Trump-style infrastructure plan
© Getty Images

Urban roads are far more likely to benefit from private sector funding than rural areas, according to a new study released by the American Action Forum (AAF).

The findings underscore the challenges for policymakers in crafting a massive infrastructure package — one of President Trump’s chief campaign promises — that can attract the support of both fiscal conservatives and rural Republicans.

Trump has yet to sketch out his plan in detail, but he floated a proposal on the campaign trail that would offer federal tax credits to private investors that back transportation projects.

ADVERTISEMENT
“The most likely candidates for increased private sector participation are the urban roads bearing the most vehicle traffic, and thus having the potential to generate enough toll or congestion-pricing revenues to offset costs,” the AAF report says.

The concern that private firms will only be attracted to urban projects that can recoup their investment costs through a revenue stream has been raised repeatedly over the last several months, but the AAF says “this paper puts some empirical meat on this observation.”

The research compiled a map of where U.S. roads have the highest volume of traffic, which is largely in major metropolitan areas, and compared it with where there are toll ways. The study found that toll ways are disproportionately high in regions with higher traffic volumes.

Similarly, nearly every active project using federal grants through the Transportation Infrastructure Finance and Innovation Act to help leverage private capital for transportation projects was found in a high-congestion region.

But urban roads that experience more strain and volume are also in a worse state than roads in rural regions, which may bolster the argument for funneling more investments toward them, whether in the form of private financing or direct spending.

Trump has also long talked about the need to revitalize America's inner cities. Nearly 20 percent of urban roads did not meet the federal standards for acceptable road quality, compared to 3 percent of rural roads, according to the report.

Repairing the nation’s roads, bridges and other public works is an idea long-championed by former President Barack ObamaBarack Hussein ObamaReport: FCC chair to push for complete repeal of net neutrality Right way and wrong way Keystone XL pipeline clears major hurdle despite recent leak MORE and congressional Democrats, who repeatedly ran into a buzz saw of opposition from Republicans, primarily over the scope of federal spending and how the massive costs would be paid for.

Trump is attempting to ease those concerns by pushing the Republicans' favored strategy to put private companies in charge of transportation projects instead of the federal government.
 
But the legislation could set off a feeding frenzy in Congress as lawmakers fight over which infrastructure projects ultimately get included in the package.

The AAF report suggests that Congress targets construction projects that would have national economic benefits, such as areas that affect truck mobility.

“The private sector alone cannot make the necessary improvements to the nation’s infrastructure problems, but can be a powerful tool if employed correctly,” the report states.