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Reading the Tea Leaves of Trump's Infrastructure Proposal

13 Mar 2018 11:04 AM | Anonymous member (Administrator)

by Steve Dwyer 

What does one make of President Trump's infrastructure proposal, a budgetary plan announced last month with mixed messages galore?

The President announced a sweeping plan that proposes to rewrite long prevailing funding options for cleaning up brownfields and Superfund sites.  That part sounds good on paper for a funding mechanism that needs re-writing. 

Unveiled the middle of February, the proposal seeks new avenues for providing federal funding for contaminated site cleanup, potentially speeding progress toward redeveloping sites. At the same time, the budget plan would slash traditional funding mechanisms for brownfields and integrate a legislative mechanism for ongoing approvals. Does anyone here need to inject additional bureaucracy into the mix? 

Slashing traditional funding sounds tremendously ominous, but, indeed, the Trump proposal would actually trim the annual EPA budget earmarked for contaminated sites-this is a budget already regarded as thread-bare, based on the supply of brownfields comprising the U.S. portfolio.   

As one brownfield practitioner put it, the federal funding for brownfield sites inventory is really, currently "a drop in the bucket" to support what's needed to accelerate developments to their full extent. The federal funding would be scaled back even more from an already-austere level. 

Here are some specific details: Trump's proposed fiscal 2019 budget would cut the budget to $16 million. In fiscal year 2017, the EPA's Brownfields Program received about $25 million from Congress.

The budget request would maintain Superfund outlays at about $1.1 billion for fiscal 2019, which does not do a typical brownfield any good. 

The proposal expands the types of projects eligible for EPA's brownfields grant funding, allowing Superfund sites or parts of those sites access to that money. So in that subtext, Superfund sites would be the beneficiaries of capital infusions at the expense of brownfields (unless you consider Superfund sites to be the ultimate brownfield sites).

More specifically, Superfund and brownfield sites would gain access to financing under the Water Infrastructure Finance and Innovation Act (WIFIA) lending program to address contamination to water resources.

The EPA also expects to receive about $10 billion in a new $50 billion Rural Infrastructure Program Trump proposes, which would provide grants for brownfield sites.

The scale of overall brownfield funding doesn't match need. A potential silver lining is that a bipartisan-supported bill in the House crafted late last year would reauthorize EPA's brownfields grant program, requesting $200 million for annually. This bill passed the House in December but a Senate vote had not yet been scheduled.

This proposal would intensify the role of Congress in a more ongoing basis as the proposal would create new loan and grant programs but require legislative action in doing so. One potential silver lining of increased legislative actions is the fact that when it comes to brownfields, bi-partisan cooperation has long been the norm. 

Here's hoping that past is prologue. 

Meantime, John O'Grady, president of American Federation of Government Employees Local 704, which represents EPA employees, is unsure the president's infrastructure reform would help the Superfund and brownfield programs.

"There's no magic bullet here," O'Grady told Bloomberg Environment. "It's kind of like smoke and mirrors."

Dan French, chief executive officer of Brownfield Listings, said new sources of federal funding will boost developers' demand for brownfields.

"Additional public capital is particularly helpful because of the way the brownfield market is bottlenecked, wherein deals don't initiate because there's too much uncertainty or risk for anyone in the private sector to even study the project in the first place," he told Bloomberg Environment.

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