Forward Janesville - TheReport - Second Quarter 2018

So everyone is happy, right? Not necessarily. The U.S. Chamber crowd is less than thrilled with our nation’s trade policy—specifically, the lack of progress on North American Free Trade Agreement (NAFTA) modernization, our trade relations with China, and the recently announced tariffs on imported steel and aluminum. The president’s position on the latter issue has put him at odds with many top Republicans and economists, who fear that these tariffs will lead to higher material prices and potential job losses in non-aluminum and steel related industries. Infrastructure’s Importance: President Trump has unveiled a plan to stimulate $1.5 trillion in new infrastructure spending over the next decade by investing over $200 billion in federal money to encourage state and private sector spending. A significant state matching requirement is the centerpiece of the package. States will need to step up with significant funds of their own to unlock federal funds. This is good news, as it will force Wisconsin state leaders to have an adult conversation about the future of transportation funding in our state. When asked how a $200 billion federal investment could be the catalyst for generating $1.5 trillion in nationwide spending, D.J. Gribbin, the Special Assistant to the President for Infrastructure and one of the speakers during our White House Policy Briefing, sounded the death knell for the 80/20 federal/state funding split. For decades, states could expect to receive about 80 percent of the funding for federal highway projects from the federal government, while putting up only 20 percent of the funds themselves. Mr. Gribbin told us that 80/20 has been a thing of the past for some time now, and that the percentage has really flipped: states are now expected to put up about 80 percent of the money for these mega projects, while the feds will throw in the last 20 percent. Twenty percent of $1.5 trillion is $300 billion, which is at least in the same ballpark as $200 billion. The idea is for states to come to the table with well thought-out, mostly funded projects that need a federal nudge over the finish line. Projects like the I-39/90 expansion would be well positioned for such federal help. The infrastructure proposal also eliminates federal barriers to tolling and gives states the flexibility to collect tolls on interstate highways to allow for additional local infrastructure investment. Additional tolling could face an uphill battle in Congress, as many lawmakers are wary of facing the subject. Forward Janesville supports the elimination of federal restrictions on tolling because we should be able to decide for ourselves whether we want tolling— something federal law currently prohibits. The big question is how the plan will be paid for and what the federal share will be. Some, including the U.S. Chamber and the President himself, have voiced support for raising the federal gas tax, which hasn’t been altered since 1993. A 25-cent gas tax increase would raise $375 billion over the next 10 years, which is more than enough to finance the infrastructure package. However, House Speaker Paul Ryan has said that raising the gas tax is off the table, so it’s back to the drawing board. The President and Congress have an ambitious timeline for the infrastructure package, with hearings and a bill draft in April, and possible Congressional consideration in July. Any action on the package would probably need to come before the August recess, as Congress will have its eyes on the November election by summer’s end. See You Next Year? Thank you to all who shared this journey with us. We have already started thinking about our 2019 trip, which will take place in early spring. If you’ve never been on this trip, it is an experience worth considering. Stay tuned for details later this year.