As we head to the end of the year and the presidential transition proceeds, we continue to hear that a major infrastructure bill could be a top priority for the new president and congress. While there is no shortage of needed projects, and even the potential for bipartisan support for new, much needed investment in our nation’s critical infrastructure such as roads, bridges, airports and water systems. One thing that is lacking is a clear consensus on how to pay for the package that some estimate to total up to $1 trillion. This week’s newsletter features different articles about the proposed infrastructure package as well as ideas on how to pay the tab. I encourage you to look at the various funding proposals and think about what is in our nation’s best interest long term. Our country has benefitted tremendously from earlier generations’ commitment to building and maintaining infrastructure. But the last time the federal government increased the gas tax, the primary source for highway funding, was in Bill Clinton’s first term in the White House. Nearly a quarter century of construction inflation has tremendously eroded the Highway Trust Fund’s purchasing power, and we simply have not kept up with needed maintenance and expansion of our roads. Everyone seems to agree that upgrading our infrastructure is necessary and will be very beneficial to the economy in both the short and long term. But the big question we must we willing to answer is are we willing to pay the price.
Michael Reeves, President
We are a voice for our small town, grassroots members who may otherwise not have access to the right audiences, as well as a conduit for industry to come together in support and promotion of transportation improvements.
We are committed to working as an Alliance to improve transportation infrastructure and business networks opportunities, by advocating for appropriate funding levels, so business and industry can thrive.
We are focused on the economic and business interests that are the lifeblood of the region.
Extension of I-27/Ports to Plains Corridor
This section will become a regular part of the Ports-to-Plains Alliance newsletter. It will be designed to help our members and others to better understand the current status of and the opportunities presented by the Extension of the I-27/Ports-to-Plains Corridor in Texas.
According to the Texas Freight Mobility Plan, “By 2040 over 73 percent of Texas’ population and 82 percent of the state’s employment is projected to be located within five miles of an interstate.” An extended Interstate 27 is critical for the economic competitiveness of West Texas.
Trump Eyes a Bipartisan Idea to Pay for Rebuilt Roads, Bridges
Republicans and Democrats have pitched a national infrastructure bank
President-elect Donald Trump and his transition team are mulling ways to finance a massive infrastructure-rebuilding project, floating an idea championed by some Democrats as one option to get a legislative package to his desk.
During their bitter presidential campaign, Democratic nominee Hillary Clinton had championed an infrastructure investment bank while Trump proposed paying for projects by “repatriating” profits U.S. corporations held overseas with a one-time 10 percent tax.
But on Wednesday, Trump’s potential Treasury secretary told reporters that Clinton’s plan is in play. And there is evidence Trump’s team is already making calls to sympathetic lawmakers. Passage of an infrastructure package, despite an inevitably big price tag, could be a winner for both parties because it would create jobs, even if only temporary ones.
“If they’re serious about doing something in this area, and doing it on a bipartisan basis, we are certainly ready to work with them,” Maryland Democratic Rep. John Delaney, a major proponent of infrastructure upgrades and a federal bank, told Roll Call on Wednesday. “We feel like we have a framework ready to do this.”
He said previous efforts, which didn’t result in floor votes, had “massive bipartisan support.” As for the incoming administration, he added, “We hope this is one of their first 100 days priorities.”
Bank proponents perked up when former Goldman Sachs executive Steven Mnuchin, a Trump transition team executive committee member who has been mentioned as a possible Treasury secretary, told a media pool earlier in the day in New York that the idea is getting “very big focus” from the president-elect and his economic team. Read on…
AASHTO Board Highlights Need for Long-Term Fix to Highway Trust Fund Shortfalls
The chief executives of state departments of transportation told Congress and the incoming Trump administration that even after last year's Fixing America's Surface Transportation, the Highway Trust Fund will soon be back in crisis mode unless lawmakers provide a long-term funding stream for it.
Officials at the Nov. 12-15 annual meeting of the American Association of State Highway and Transportation Officials discussed the potential for a soon-to-be President Trump to follow up on his campaign promise to send Congress a major infrastructure investment plan.
But the state officials wanted to underscore the need to move beyond temporary infusions into the trust fund and dedicate more revenue to put it on solid footing for many years to come.
AASHTO's board – which includes the CEOs of all state DOTs plus those of Puerto Rico and the District of Columbia – approved one resolution Nov. 15 at its annual meeting that offered the "vast policy and technical expertise" of AASHTO and member DOTs to President-Elect Trump and Vice President-Elect Mike Pence to help them develop infrastructure improvement initiatives.
The board also adopted a resolution that spelled out the longer-term need to fix the trust fund.
"Any responsible new infrastructure funding proposal needs to take into consideration and address the long-term solvency of the Highway Trust Fund and maintain the historic 80/20 split of revenues between the Highway Account and the Mass Transit Account," it said.
Some conservative groups continue to urge Congress to split transit investment out of the trust fund, but the AASHTO board statement underscored the need to dedicate the current percentage of HTF receipts into mass transit services.
That resolution also embraced language of an AASHTO-AGC-ARTBA Joint Committee to "urge the next administration, the U.S. House of Representatives and the U.S. Senate to secure the long-term solvency of the Highway Trust Fund by providing real, reliable, dedicated and sustainable revenue sources derived from the users and beneficiaries of the system."
American Trucking Association Editorial: Seize the Day on Infrastructure
Daylight hours are dwindling rapidly now, yet this is the time to make hay because, in a sense, the sun is shining on makers of highway and transportation policy.
American Trucking Associations said it is speeding up efforts to become involved with the infrastructure program being developed by President-elect Donald Trump and his aides. He envisions spending $1 trillion over 10 years.
The ramifications of such an Eisenhower-like plan for trucking are potentially enormous, so the acceleration of the creation of an ATA infrastructure task force makes a great deal of sense.
Trucking and the nation are desperately in need of sturdy bridges and well-kept highways that are not perpetually clogged with traffic. The five-year FAST Act signed in December 2015 took a swipe at this but didn’t do nearly enough. Its main virtue was that it ended the long-reigning chaos of a lengthy chain of temporary extensions.
This could make a real difference for the nation’s network of roads, bridges, airports, electric grid and water systems — the prosaic but essential components of civilization. But how to pay for it all?
ATA still backs fuel-tax increases on diesel and gasoline, which would then be protected against inflation through indexing. While this has been a superb mechanism for feeding the Highway Trust Fund, Congress has been loath to raise those tax rates.
The perfect cannot be the enemy of the good, so ATA is looking into what its president, Chris Spear, calls “a number of robust funding sources.”
Texans fear Trump's highways plan will create more toll roads
The president-elect's proposals to expand and fix up U.S. highways seem to be a recipe for more toll roads. Texans from both parties hope to change that.
Part of president-elect Donald Trump’s promise to create new jobs for Americans relies on a “deficit-neutral plan” to spend $1 trillion on public works projects, including hundreds of billions for roads and rail.
But the strategy could result in something many Texans aren’t going to like: more toll roads.
“Unfortunately that’s the way I’ve read it,” said state Sen. Don Huffines, R-Dallas, vice chair of the Texas Senate transportation committee.
There are also fears the plan could provide few new highway projects or road improvements to the state’s vast rural areas. And the lack of details in the proposal has so far made it unclear how Texas’ urban transit agencies could be affected.
Trump’s plan is already getting some opposition from his own party in Washington, D.C. In the Lone Star State, where residents have balked at a growing number of toll projects, state officials from both political parties are hoping the incoming president backs off reliance on the private sector.
“To be direct, it’s a little scary and kind of contrary to where our current leadership in Texas has been going the last couple of years,” said state Rep. Joe Pickett, D-El Paso, who chairs the Texas House transportation committee.
Under the current proposal, the $1 trillion in infrastructure investment would come not from the government, but from private companies who would receive tax incentives for borrowing funds needed for construction costs, according to Trump’s campaign and transition websites and a paper authored by two of his senior advisors.
The private firms who build the roads, though, would expect a revenue stream to cover principal, interest and operating costs. And the most common way to create a revenue stream on a road is to toll it.
“To suggest public-private partnerships and relying on tolls, we’ve already kind of maxed those out,” Pickett said.
Trump's trade, immigration proposals mixed bag for West Texas agriculture
Advocates want new agriculture secretary to consider cottonseed listing
President-elect Donald Trump’s proposed trade policies have potential to help or hurt West Texas agriculture, say analysts.
Meanwhile, cotton advocates hope administration changes mean another chance for farm bill coverage of their commodity.
While not every elected official acts on every campaign promise, analyses are based on the scenario that Trump’s proposals are sincere.
Farmers and their supporters can only speculate who Trump will appoint to replace Tom Vilsack as secretary of agriculture. They certainly like the idea, though, of a new set of eyes and ears on their request to list cottonseed in the 2014 farm bill.
“Our goal would be to get something in this farm bill,” said Steve Verett, executive vice president of Plains Cotton Growers. “We’re going to try to be as influential as we can getting that changed, even before the new farm bill.”
Cottonseed is separated from cotton lint in the ginning process; its uses include dairy cattle feed and cooking oil. A farm bill listing would have classified cottonseed as an oilseed, a category that includes other commodities such as canola and flaxseed. U.S. House of Representatives Agriculture Chairman Mike Conaway and others have supported the designation, but Vilsack announced in February he lacks authority for the listing.
Formal discussion for the 2018 farm bill could start next year.
A Hotel’s Impact on a Rural Community Is More Than Just Dollars and Cents
I recently attended an annual conference held by a hotel brand that specializes in, and is committed to rural communities. During the conference I attended a panel discussion with a group of investors who own a number of hotel facilities operating under this flag. While the group discussed a variety of best practices as well as their specific experiences with this brand, one question posed to the group caught my attention. The moderator asked the panel why they ultimately decided to invest in the hotels they owned. To a person, each investor replied that the number one reason for making the investment was to help their community.
To those of us who live in rural communities, that reasoning doesn’t seem as strange as it may to those who live in larger urban areas. Living in rural areas teaches us that collaboration is key to accomplishing anything. In fact, one of my greatest joys as an economic developer is taking my place at the board room table as I listen to the various organizations in our community discuss their partnerships and the importance of those relationships in accomplishing their goals. It’s something that makes small town America unique. It gives small town America its identity. Working together for a common goal.
According to conference keynote speaker Glenn Haussmann, President of Rouse Media and recognized hotel industry expert, more rooms will be sold in 2016 than ever before. That said, how can small towns capitalize on this boon as well? About right now you may be thinking, hold on a minute Corey; how can a hotel cash flow in a town of under 5,000 in population? That can’t happen.
To some industry experts who feel the same way, you may have a valid point. In fact, one participant in a panel discussion on feasibility during this very conference even said, “good luck trying to get a 30 room facility cash flow.” But to those who are willing to consider something different, daring and distinct; there is a business model for success in rural communities. The investor panel provided proof positive that an effective small town model exists. In fact, when questioned about facility performance, none of the investors on the panel had experienced a cash call and each of the panelists indicated that the operations of their hotels were outperforming their financial projections.
Who cares? What’s the big deal? Why is this so important? Our rural communities’ very lives may depend on it.
So how can a hotel facility impact a rural community? Let’s take a look at a few possible impacts.
Those of us who live in rural areas are familiar with the concept of leakage. Leakage may apply to various sectors like retail, food and beverage or lodging but whatever the specific industry sub-sector we are familiar with, the general concept remains that people are leaving our communities to transact business in the next community over and our revenues and quite possibly our profits are leaving with them.
1. Hotels can help small communities re-capture lost revenues.
2. Hotels provide support for local businesses, families and organizations.
3. Hotels provide meaningful local experiences.
4. Hotels can bring more dollars and cents to your community.