President Trump’s infrastructure plans probably involve more tolls
Get ready to pay when you take to American roads
By A.W. | WASHINGTON, DC
FOR business travellers trying to work out what the Donald Trump era will mean for them, one of president’s central campaign promises seemed to bode well: investing up to $1trn in American infrastructure. But anyone hoping for smoother roads, faster rides and more efficient airports might be in for a rude awakening, in the form of long waits and extra expenses at the toll booth.
American infrastructure needs an upgrade. The American Society of Civil Engineers is already complaining that a 13-figure investment might fall short of the $3.6trn required to bring roads, airports, pipelines and the like up to par. But the crux of the issue is not the amount Mr Trump will spend; it is how that money will be allocated. The answer appears to be that it will be spent by private companies on projects where they can turn a profit.
On Tuesday, the Congressional Budget Office projected a growing federal budget deficit that will add $8.6trn to the national debt over the next decade. That report will only stiffen Republican resistance to any proposals that require substantial new federal spending. And that resistance helps to explain why Mr Trump’s infrastructure plan doesn’t actually involve spending $1trn of public money, or anything close to that figure. Instead, the plan offers tax incentives to private companies that undertake infrastructure projects, with the hope that the total investment will add up to $1trn over 10 years.
Private investors don’t fix roads for the sake of smoother asphalt. They do it to get a return on their investment. That means the projects undertaken will be ones that make money through user fees—in most cases, tolls. “If he moves forward with an infrastructure plan and there are tax incentives to investors, that could bode well for more investments in new toll facilities,” Patrick Jones, chief executive of the International Bridge, Tunnel, and Turnpike Association, told the Hill.
As Jordan Weissmann pointed out in Slate, the plan might appear to save Americans money because it doesn’t require taxpayer funding, or at least not much of it. But people would still have to pay later on, when they actually use the facilities:
They would eventually earn their profits on the back end from usage fees, such as highway and bridge tolls (if they built a highway or bridge) or higher water rates (if they fixed up some water mains). So instead of paying for their new roads at tax time, Americans would pay for them during their daily commute. And of course, all these private developers would earn a nice return at the end of the day.
That might be a wash for Americans, since they pay either way, although this way they lose say in which projects get undertaken. (Private developers won’t fund free roads, nor are they likely to tackle projects in low-income areas where the need might be great but the ability to pay is limited.) But for travellers to America it is more of a problem. Not only will they have to pay to traverse roads and bridges, but they will also have to waste time at toll booths. Many residents possess the electronic passes that allow them to pay tolls without coming to a full stop. But visitors often don’t, meaning they have to wait in line to get onto or off highways and bridges.
On Tuesday, Senate Democrats offered their own trillion-dollar infrastructure bill. This one would be kinder to travellers to the United States. It would rely less on private funds—fewer tolls—and it would also invest substantially in types of infrastructure that travellers rely on, including $180bn for rail and bus systems and $65bn for airports, ports and waterways. It is Democrats’ way of telling Mr Trump that they are willing to cooperate with him on his campaign pledge if he will consider doing it on their terms. Don’t expect him to seize that olive branch. Instead, get ready to pay up when you take to American roads.
