Tuesday, January 10, 2017
Some Mississippi Republican leaders invoked President-elect Donald Trump's expensive infrastructure plan last week when discussing Mississippi's crumbling roads and bridges, seeming to believe it will solve the state's urgent issues with roads and bridges.
But they did not talk about who will pay the costs of Trump's plan—which is based on tax breaks for corporations that agree to fund the improvements.
At the Mississippi Economic Council's Capital Day, Gov. Phil Bryant said he thinks Mississippi can lead the way with infrastructure improvements, especially with Trump in the White House providing help from the federal government.
"That's the type of result we get from a President Donald Trump and the possibilities of him working with the governors across the nation so that we will have a plan that is in sync with one another," Bryant told business leaders at the Jackson Marriott last week.
Bryant, who campaigned for Trump, said he is talking not only with state leaders but also with the president-elect about the plan. The governor seemed to be pushing more economic development as a means to fund Mississippi's roads and bridges.
Independent research from the University of Southern Mississippi and Mississippi State University shows that 2,400 of the state's bridges cannot carry their weight capacity any longer, and MEC estimates that about $375 million is needed annually in the next decade to restore bridges and roads that have gone without major repairs since the Mississippi Legislature last funded its highway program in 1987.
The governor referenced an MEC study that found that the Canton Nissan plant contributes close to $300 million annually in local and state tax revenue.
"So if we get one more Nissan, problem solved," Bryant said on Jan. 5.
The Trump Plan
Trump's infrastructure plan has already morphed since he was elected. His initial proposal was a $1-trillion plan that relied primarily on the private sector to invest in the program, incentivized through tax credits.
"These tax credits offered by the government would be repaid from the incremental tax revenues that result from project construction in a design that results in revenue neutrality. Two identifiable revenue streams for repayment are critical here: (1) the tax revenues from additional wage income, and (2) the tax revenues from additional contractor profits," an October 2016 policy paper from Wilbur Ross and Peter Navarro, two of Trump's senior policy advisers, stated.
On his transition website, the president-elect has scaled down his $1-trillion plan already. The site says he now seeks to invest $550 billion in the country's transportation network but does not explain how that will work.
"We will harness technology and make smarter decisions on how we build and utilize our infrastructure," the greatagain.gov Transportation page promises.
Trump's nominee for secretary of transportation, Elaine Chao, has yet to lay out her plan, but has said she supports Trump's "clear vision" for infrastructure in the country. Experts from both sides of the political aisle told The Wall Street Journal that they are skeptical that Trump's push for private-sector funding of public infrastructure can or will work.
The October 2016 policy paper shows that Trump wants to rely on the private sector to finance infrastructure projects, and Navarro and Ross estimate that financing $1 trillion for infrastructure would need an "equity investment of $167 billion, obviously a daunting sum."
Pat Jones, the executive director of the International Bridge, Tunnel and Turnpike Association, told The Wall Street Journal that Trump's plan "strikes me as sort of a concept paper or a thought piece as opposed to a real plan."
No Clear Direction
How federal infrastructure funding could help Mississippi is not clear, never mind the plan itself, and lawmakers have different approaches on what to do now.
Senate President Pro Tempore Terry Burton, R-Newton, acknowledged Trump's commitment to infrastructure, as well as the pressing need for state lawmakers to address their infrastructure issues this session.
"The president-elect has made the comment that infrastructure is important to him, so we need to see exactly what that Washington answer is going to be," Burton told business leaders at the Capitol.
"We need to have those discussions before we can make final decisions, but we can't, in my opinion, let another session go by without trying to something about our infrastructure."
Senate Transportation Committee Chairman Sen. Willie Simmons, D-Cleveland, told the Jackson Free Press in December that even if Trump enacts a plan, Mississippi should act first because the federal funding likely would not address all the state's infrastructure funding needs.
"It's better to do it first because if he (Trump) does one or brings (a plan) forward, it will address some of the issues for the nation, but it won't be the savior for Mississippi," Simmons said in December.
"We would get additional dollars, but it wouldn't take care of the 4,000 bridges in our state and the additional lanes of deficient highways."
Simmons told business leaders last week that lawmakers need to take President Ronald Reagan's approach and raise taxes to fund the infrastructure needs.
MEC estimates that if the Legislature implements a system of user-based taxes and fees, it will cost a Mississippian who uses roadways about 37 cents a day, or $150 annually—a cost they say is much cheaper than the damage that could be done driving on dangerous roads in the future.
House Speaker Philip Gunn, R-Clinton, addressed the "difficulty" he sees with raising taxes and fees to pay for infrastructure, pointing to the supermajority of votes needed (74) in the House of Representatives to pass a tax bill.
"These are legislators who have campaigned upon smaller government; they have stood for lower taxes; they have stood for creating a business-friendly environment; they have relieved tax burdens," Gunn said last week.
Business leaders around the state have already rallied around MEC's plan. Joe Sanderson Jr., who chairs MEC's Blueprint Task Force, wrote to lawmakers about the issue last session, with concerns of the long-term impact putting off the state's roads and bridges problem will have on the economy.
"There will be lost opportunities for business growth and lost opportunities for Mississippians who could've had good paying and productive careers," Sanderson Jr.'s letter to lawmakers warns.
Gunn said he plans to continue to look at the Mississippi Department of Transportation's budget to find efficiencies he thinks can help fund the infrastructure.
"We're going to do the best we can to find a way to meet the issue about roads and bridges, and if we can't do it this year, we'll keep working until we're able to do that in years to come," Gunn said.
Simmons, who called the state's infrastructure woes a "major, major crisis," told business leaders that Mississippi cannot afford to wait longer to act on a solution.
"We need you to communicate to each of us and let us know because raising taxes and fees is very difficult," he said. "And the closer we get to an election it gets even more difficult because we have concerns about how they're going to react to it."
Email state reporter Arielle Dreher at [email protected] and follow her at @arielle_amara.
More like this story
- Leg, No Time to Wait for Trump on Transportation
- Declining Federal Highway Funds Hurt Mississippi
- Making Ends Meet: Lawmakers Wrestle with Education, Infrastructure and Shrinking Revenue
- UPDATED: Feds Close Over 100 Mississippi Bridges, Senator Says
- Fixing (Some) Roads and Bridges Still Possible in 2017 Session