AMWA: White House seeks new revenue to pay for infrastructure package

The Trump administration is developing a “package of principles” for infrastructure investment legislation, White House staff told the Association of Metropolitan Water Agencies (AMWA) and other water sector stakeholders at an informational session earlier this month.

According to AMWA, the legislation would incentivize the development of ongoing revenue streams to help pay for large, urban water projects and would also make additional block grant funding available for rural projects.

According to administration staff, the White House will not write specific infrastructure reform language to send to Capitol Hill, but instead will release a set of principles they will urge Congress to build around.  The water and wastewater portion of the plan will include four “buckets” of funding, which will go toward:

  • Incentivizing state and local infrastructure owners to develop new revenue streams to provide ongoing funding for water infrastructure, particularly in urban areas (potentially through new public-private partnerships);
  • Providing block grants for rural projects;
  • Having the federal government work with sponsors to facilitate large, “transformative” projects; and
  • Increasing the size and scope of existing leveraging opportunities through the Water Infrastructure Finance and Innovation Act (WIFIA) program and expanding the use of private activity bonds.

White House staff told the group the administration will support $200 billion in new federal spending across all infrastructure sectors, which they believe could be leveraged into as much as $1 trillion in actual funding, once private sector contributions come into play.

The staff also backtracked from previous reports that indicated President Trump’s tax reform plan would preserve the tax-exempt status of municipal bonds. In response to a question, a White House official said taxing municipal bond interest could offset envisioned cuts to the corporate tax rate, before noting that muni bonds’ role in the tax plan remains unsettled. According to AMWA, the staff also expressed unfamiliarity with Trump’s campaign-era pledge to triple funding for the Drinking Water and Clean Water State Revolving Funds, suggesting that such a proposal will not be part of the infrastructure plan.

Information contained in this news appeared in the Association of Metropolitan Water Agencies’ (AMWA) Monday Morning Briefing.

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