White Paper released by NUCA
February 1, 2017
Preparing for Trump’s Infrastructure Plan
While running for President in 2016, Donald Trump promised to ‘Make America Great Again’ in part
by rebuilding America’s infrastructure. On October 22, 2016 candidate Trump unveiled his ‘Contract
with the American Voter’, outlining his plan for his first 100 days in office, which includes plans to
spend $1 trillion in infrastructure investment and open avenues for energy infrastructure investment.
Also in October, the Trump campaign released the Ross-Navarro Plan illustrating Trump’s plan to utilize
tax credits to encourage private investment in infrastructure. On November 29, 2016, President-Elect
Trump nominated Elaine Chao, who served as Labor Secretary under President George W. Bush and
Deputy Secretary of Transportation and Director of the Peace Corps under President George H.W. Bush,
to be his Transportation Secretary. On December 20, 2016, President-Elect Trump’s transition team
announced the creation of an ‘Infrastructure Task Force’ to manage the new President’s plan to spend up
to $1 trillion on infrastructure projects. On January 13, 2017, Trump told the Wall Street Journal that he
will be appointing Richard LeFrak and Steven Roth, two New York real estate developers, to co-chair
the oversight of project selection and spending under Trump’s infrastructure plan. On January 20, 2017,
Trump and his running-mate, Governor Mike Pence of Indiana, were sworn in, kicking off the Trump
President Trump has repeatedly expressed desire to invest in American infrastructure. He has repeatedly
cited $1 trillion as the size of the plan he prefers. House Speaker Paul Ryan has said publicly any
infrastructure plan will be discussed when Congress completes the Fiscal Year 2017 budget process
in late April in order to carve out funds for the legislation. On January 24, 2017, Senate Democrats
unveiled their infrastructure proposal ahead of Republicans or the White House.
While details of President Trump’s infrastructure plan have not yet been unveiled, the $1 trillion figure
makes finding the funds for the plan a particularly large challenge. It is very likely paying for any
plan will have multiple streams and sources, which will, in and of themselves be subject to debate and
Funding vs. Financing
Specifically, the plan’s success will depend on how it balances funding and financing to accumulate
enough support for passage. Funding describes the federal dollars directed to (or funding) infrastructure
projects, and is generally more favored by Democrats, while financing refers to the dollars leveraged
to finance infrastructure projects, and generally favored by Republicans. Below, listed from most
funding oriented to most financing oriented, are the most popular proposals for mitigating the cost of an
Preparing for Trump’s Infrastructure Plan
Direct spending/stimulus- Funding infrastructure projects through direct spending or stimulus would
direct Treasury dollars toward, presumably, specific projects or programs for building infrastructure.
In order for this method to work legislatively, stimulus dollars would likely require a monetary offset.
Essentially, if Congress decides to utilize direct spending for the $1 trillion President Trump has
suggested for infrastructure spending, $1 trillion in cuts will have to come from somewhere else in the
Tax Reform-Any discussion about taxes in America automatically becomes riddled with complexity;
infrastructure funding is no exception. There have been discussions on Capitol Hill for a number of
years surrounding undertaking tax-reform, specifically of the business and international tax code, as a
way to find money for government spending such as infrastructure.
Corporate– Corporate tax reform that has been proposed by President Trump and GOP lawmakers
in Congress includes lowering the corporate rates to around 15%, which would require eliminating,
or at least significantly scaling back, tax-write-offs and credits. In doing so, legislation could
dedicate tax streams to infrastructure such as the Highway Trust Fund or a newly created
infrastructure bank to ensure a permanent funding source. However, there is no promise that
infrastructure will receive a dedicated stream of revenue, and every interest the government
currently funds will come with their hand out looking for special treatment.
International- President Trump has repeatedly discussed changing the international tax code to
better benefit American businesses. For the infrastructure, this largely means creating a reasonable
process or incentive for U.S. companies to repatriate, or bring back to America, some or part
of their overseas-held cash. In repatriating, some or all of the tax burden could be directed
toward transportation and infrastructure accounts. If not included in a wider tax reform package,
repatriation is being discussed as a ‘tax-holiday’ which would have the same effect, but simply be a
one-time infusion of cash into transportation and infrastructure building accounts.
Private Funding– President Trump has repeatedly cited using private dollars to build infrastructure.
The President’s comments indicate he would like to use tax credits or greater utilize already-existing
mechanisms to persuade private industry to invest in infrastructure. President Trump has proposed
$137 billion in tax credits for investors who help finance infrastructure projects. Private Activity Bonds
(PABs) or Public Private Partnerships (PPPs) could facilitate greater private investments. PABs allow
private investment in different types of infrastructure by making interest earned on the investment
principle exempt from income or capital gains taxation. PPPs are joint venture partnerships between
public and private entities to finance large infrastructure project by sharing the risk, costs, and financial
gains. In order for PPPs to be effective and attractive to private investors, there must be mechanism for a
return on the investment, such as tolling on roads or metering increases for water projects, which is often difficult to create or predict with public infrastructure.
Almost as important as figuring out the cost and pay-for structure of the bill is engineering the
mechanisms for putting the funding to work. Determining what constitutes infrastructure, identifying
infrastructure projects, and getting the dollars out the door are the primary objectives.
What is Infrastructure- Any infrastructure bill will have to define the infrastructure intended to be
addressed in specific terms. As an example of why specificity is needed, the term ‘transportation
infrastructure’ could mean highways or it could mean bike paths, which are very different in terms of
cost, benefit, and economic demand generation. Defining infrastructure is important in order to ensure
that less glamorous or observable upgrades, like sewer system upgrades or water treatment facilities,
are not crowded out by high-profile projects like highways and bridges.
NUCA’s Position: Infrastructure must be defined to include water treatment, delivery, and utilization
infrastructure. Despite other forms of infrastructure being arguably more glamorous, water infrastructure provides one of the highest returns on investment, significant economic demand generation, and is essentialto public health and safety.
Identifying Infrastructure projects– The term ‘shovel ready’, which was used to describe projects
that were ready for construction in selling the 2009 Stimulus Package (but turned out not to be quite
so ready), will and should be a much more scrutinized term in any infrastructure plan. Identifying
the infrastructure projects that receive consideration and funding will likely be a new process. State
Governors and Legislatures will likely be asked to identify a specific number of projects, either by
number or cost, that could begin construction within a short, predetermined, period of time after the
legislation is enacted. Congress will then have the ability to vet and approve projects for their benefits,
cost-effectiveness, and economic attributes.
NUCA’s position: State and local lawmakers know better than Washington which areas of infrastructure
improvements are needed most in their areas. Lawmakers should take politics out of the process and allow the projects of the greatest need and economic benefit in each state to receive priority funding.
Getting Dollars to the Projects– As a result of the 2009 Stimulus Package, lawmakers are much more sensitive to ensuring tax-dollars are utilized for their intended purpose, so ensuring that dollars reach their intended recipients will be a point of debate. There are currently existing programs that are
designed for financing infrastructure projects, such as TIGER grants for transportation projects and
State Revolving Funds (SRFs) for water infrastructure projects that are both effective and popular. The
creation of an infrastructure bank or a water trust fund have been discussed for as a conduit for federal
dollars to reach local infrastructure projects, but would take time to set up and create a bureaucracy
that would delay dollars from reaching the projects. It is likely that the Trump infrastructure plan will
utilize both existing channels and create new ones, especially if tax reform dollars become the dedicated
NUCA’s Position: NUCA supports the creation of dedicated and sustainable funding mechanisms,
insulated from the federal appropriations process, to combat long-term funding shortfalls. In the short
term, there are trusted programs that should be utilized to funnel dollars to projects such as the SRFs.
While there remains a lot about the infrastructure program that we do not fully know, there are some
things, mentioned above, that we do know and should begin preparing to address. Our primary objective
is to ensure that water and underground infrastructure is not left out. Visually or politically appealing
projects will undoubtedly be a part of the final mix, but we must also convince our lawmakers of the
job-creation, economic, and health and safety benefits of investing in water infrastructure projects.
As mentioned above, project selection is likely to come from the state and local level, meaning our
members need to be meeting with state legislators, governors, and planning commissions to ensure that
decision-makers at the local level understand the value and need for water infrastructure projects. Our
second objective is to make Congress act. Infrastructure needs are too great and public support is too
high to allow Congress to play politics or get away with their recent propensity for not backing their talk
with action. NUCA must push Congress, through outreach, meetings, coalitions, and grassroots action,
to make progress by regularly and consistently applying pressure to lawmakers at the state and federal
Pre-Bid meeting for Purple Line Projects
Session 3 – WSSC Water and Sewer Line, Washington Gas Light lines, UMD/MEDCO Steam Lines Tuesday, January 31, 2017 9:00am to 11:00am
Location: PLTC Project Offices
6811 Kenilworth Ave., Riverdale, MD 20737
1st Floor – Training Room
The primary project contact for additional information or questions is:
Keith Beever l Purple Line Transit Constructors l Contracts
6811 Kenilworth Avenue, Suite 200, Riverdale, MD 20737
Today’s symposium on the January 13 – January 24 Suspension of Work was incredibly well attended. Over a dozen NUCA members had multiple representatives in attendance, along with General Contractors such as Clark, Balfour Beatty and more.
Presenting at the meeting were DDOT, Metro Police Department, OSHA, DCRA and the Secret Service.
The details on the Exemption process:
*Include the word “Exemption” in the title of the email
- Public Space permit number(s) for the work zone
- Location of work zone
- Day(s) and Hours for the exemption
- Nature/phase of work taking place during the exemption
- Basis/rationale for the exemption
- 24 hour emergency contact name, phone number, and email address
The meeting today was newsworthy – WJLA (Channel 7) had a camera crew and reporter on site, and produced a report which included statements from NUCA of DC members Victoria Leonard of Maliuna and Pedro Alfonso of DCI. See the entire report at this link:
Waldorf, MD – JESCO Incorporated, a John Deere Construction Equipment Dealer in four states throughout the northeast, broke ground on its newest facility in Waldorf, MD on November 28, 2016.
Located at 9B Industrial Park Circle, the new site is strategically located to serve the Southern Maryland and the greater Washington DC area.
The 17,043 sq. ft. facility will be constructed on 5.08 acres, will house a total of 9,417 sq. ft of service area and is equipped with six modern bays; the new building will allow for future expansion additional service bays.
“This facility will essentially mirror the branch that we built in Deer Park, NY last year” says Anthony Falzarano VP of Sales, “The new Waldorf location will give JESCO the opportunity to better service Southern Maryland and D.C. markets as we will be able to significantly increase our rental presence in the region.”
Providing the highest quality service and products has been a core function of JESCO’s business model for 44 years and will continue to be fundamental as the company expands it footprint in the industry.
“2017 is poised to be an exciting year for JESCO” says JESCO President Jonathan Robustelli, “JESCO will celebrate its 45th anniversary in 2017 and we are excited to add the Waldorf branch as a full service facility in Southern Maryland.” Robustelli adds, “The expansive parts warehouse, additional yard space and rental capability of this branch will allow us to better serve our customers’ needs”.
In addition to a full line of John Deere construction and compact equipment, the new location will supply Ditch Witch products, Bomag road building equipment, Genesis demolition tools, Indeco hydraulic breakers and Hydrema compact dump trucks for sale and rental.
JESCO anticipates the Waldorf facility to be fully operational by the fall of 2017. Once completed this will be JESCO’s twelfth operational branch.
Other areas serviced include Baltimore, Frederick, Delmar, District Heights and White Plains, Maryland; South Plainfield, Mount Holly and Fairfield, New Jersey; Beacon and Deer Park, New York; Middletown, Delaware and Shrewsbury, Massachusetts.
For more information, call 800.241.7070 or visit http://www.jesco.us/.
DC City Council Tentative Committee Assignments for 2017-18 Released, Pending Confirmation January 2
Chairman Mendelson has now released a tentative listing of committees for Council Period 22 (2017-2018). Every element of this list is tentative, and will remain so until the Organizational Meeting to be held on January 2, at which time the Council will formally approve its committee structure and rules for the two years to follow.
COMMITTEE ON BUSINESS DEVELOPMENT AND REGULATORY AFFAIRS
Kenyan McDuffie, Chairperson
COMMITTEE ON EDUCATION
David Grosso, Chairperson
COMMITTEE ON FINANCE AND REVENUE
Jack Evans, Chairperson
COMMITTEE ON GOVERNMENT OPERATIONS
Brandon Todd, Chairperson
COMMITTEE ON HEALTH
Vincent Gray, Chairperson
COMMITTEE ON HOUSING AND NEIGHBORHOOD REVITALIZATION
Anita Bonds, Chairperson
COMMITTEE ON HUMAN SERVICES
Brianne Nadeau, Chairperson
COMMITTEE ON THE JUDICIARY
Charles Allen, Chairperson
COMMITTEE ON LABOR AND WORKFORCE DEVELOPMENT
Elissa Silverman, Chairperson
COMMITTEE ON TRANSPORTATION AND THE ENVIRONMENT
Mary Cheh, Chairperson
The DC City Council voted to pass the Paid Leave Act in an amended form on December 20, 2016. The Act received its required first vote at the previous Legislative Meeting earlier in December, and passed by a vote of 11 to 2. In the interim, an alternative version of the bill focusing on an employer mandate rather than a payroll tax was circulated. NUCA of DC supported this version of the paid leave act. It was introduced as an amendment in the nature of a substitute, but was subsequently defeated by a vote of 8 to 5. An amendment was accepted that mandates a review of the bill three years after implementation, to determine if the tax rate and/or benefit levels should be revisited. In the end, the bill as amended passed by a 9 to 4 vote.
The core benefits and funding structure of the bill did not change between readings: the bill provides eight weeks of care when a new child joins a household (through birth, adoption, foster care, or assumed legal guardianship), six weeks of care for sick relatives, and two weeks of self-care. A 0.62% tax rate would be applied to employer payrolls, generating a maximum $1,000 weekly benefit. Employees would receive a benefit equaling 90% of their salary, up to 1.5 times the minimum wage, then 50% of their wage, up to the previously stated maximum.
Under the approved structure, the benefits will be administered by a yet-to-be-established District agency.
The DC City Council voted Tuesday to implement a plan to provide more than half a million workers with eight weeks of paid leave for the birth or adoption of a child, one of the nation’s most generous paid family leave programs.
Tuesday’s 11-to-2 vote by the D.C. Council came despite concerns that the leave program would harm small businesses and cost some workers their jobs. Although three states guarantee paid family leave, all of them fund the benefit in part through employee contributions. DC’s plan is proposed to be funded by a payroll tax and administered via a new city department.
The council initially proposed 16 weeks of paid family leave, funded by a 1 percent payroll tax on businesses. That was then cut to 11 weeks, to reduce the payroll tax to 0.62 percent. On Tuesday, the Council cut it further, to eight weeks for a new child or six weeks to care for a sick relative, while adding two weeks of leave for a worker’s own illness or injury. No state currently guarantees eight weeks of paid leave, although New York will when its program launches in 2018.
Workers would receive up to 90 percent of their salary, with the benefit capped at $1,000 per week. Council Chairman Phil Mendelson said that structure ensures that the city’s lower-income workers stand to gain the most from the benefit.
The council will take another vote on the program in two weeks before sending it to the mayor’s desk.
DC Mayor Muriel Bowser has not said whether she would sign the bill, but the 11-to-2 margin would be veto-proof if it holds when the council votes again. Critics of the plan cited the program’s costs, its uncertain effect on businesses and the fact that more than 60 percent of those who would get the benefits live in Maryland and Virginia.
If the bill becomes law, it would be sent to Congress for approval, like all laws in the District, and it could run into opposition with Republicans controlling both houses of Congress and the presidency. Congress can pass a resolution invalidating a District law, although that’s extremely rare. Congress more often blocks city policy in other ways, usually through amendments to spending bills.
The bill applies only to private employers because the city cannot tax the federal government and the local government already has a paid leave program. Supporters said funding the program through a payroll tax was the only option because the District is barred from taxing workers who don’t live in the city.
The DC Council Universal Paid Leave legislation appears to be moving forward quickly with passage likely by the end of December. Today Chairman Mendelson will release a new version of his legislation. Councilmember David Grosso has told the press this legislation will be the most expansive paid leave benefit in the country.
From coalition conversations and what has been reported in the press the bill will consist of 11 weeks of maternity/paternity leave and 8 weeks to care for a parent or grandparent. Employees would be eligible to receive up to 90% of salary with the benefit being capped at $1,000 a week. The bill will cover those who work in DC regardless of where they live. Both Federal employees and DC residents who work in other jurisdictions will not be permitted to opt-in to the program.
The program will be funded by a .62% payroll tax that is estimated to begin in January of 2019 that will create a new technology infrastructure and a DC government-run program. Employees will not be able to draw benefits from the fund until January of 2020. NUCA of DC has serious concerns as to how some of our members will be able to both pay the tax and provide strong benefits during this period of limbo.
Chairman Mendelson has reiterated his goal to pass the legislation before January. He plans to have the council take the first vote on Dec. 6 and the final vote on Dec. 20. Should the council vote twice in favor of the bill, it will be up to Mayor Muriel Bowser whether to veto the legislation. Bowser has voiced concern about the bill’s cost and its impact on the business community. The law would also need to be approved by the Republican-controlled Congress, though it is rare for Congress to invalidate a District law.
NUCA of DC, in conjunction with other invested organizations will continue to push for the alternative Employer Mandate model as it provides full wage replacement for 8 weeks at a lower cost while preserving the existing employer-employee benefits relationship. We will be sure to keep you updated as this issue progresses.
INSURANCE ASSOCIATES ANNOUNCES OUR LATEST NEW HIRE AND TWO PROMOTIONS
Insurance Associates is excited to announce the hire of our newest associate, Karen Garceau, and the promotion of two employees: Lexi Stock and BJ Westner.
Karen was hired to Insurance Associates in May 2016. Her career started early in high school working for her father’s property and casualty insurance firm in Maine. For twenty years after this she specialized in construction at an independent insurance agency in Florida. Karen was responsible for account management, risk management, client services, marketing, sales, and agency operations. She brings her greatest strengths to IA that consists of understanding the unique insurance needs of the construction industry and her ability to solve problems. In her spare time, Karen enjoys spending time with her four children and four grandchildren, camping, hiking, and going to the gym.
Karen graduated from Florida State College at Jacksonville and also earner her Certified Insurance Counselor designation in 2003 and Certified Risk Manager Designation in 2009.
We are pleased to announce the promotion of Lexi Stock to Director of Marketing and Communications for the agency. Lexi has been with IA since 2012 and is proud to have developed their strategic marketing plan from the ground up. Her marketing responsibilities include increasing brand awareness, agency newsletters, social media, e-blast campaigns, and the company website. In addition to marketing responsibilities she also demonstrates our interactive portal to clients and manages all public relations activities for the agency. In her spare time she represents IA as Chairman for Associated Builders and Contractors of Metro Washington (ABC)’s Young Professionals Group, ABC.XYZ.
Lexi received both her BBA and MBA from Loyola University Maryland.
We are also pleased to announce the promotion of BJ Westner to Senior Claims Consultant. BJ has been a significant part of our claims team for over four years and has made a huge impact in our ability to provide top notch, value-added service to our clients. With over sixteen years of claims experience, his technical skills, education, and eye for detail, BJ has been an aggressive advocate for our clients. Since joining the agency, BJ has assisted clients with large and complex claims as well as helped clients lower their experience mod and implement proactive back to work programs. Whether he’s using case law to get a claim paid or using his wealth of multi-lines claims knowledge to answer many “what if” scenarios, BJ is always available to help a client with their claims needs.
BJ graduated from the Associated Builders and Contractors of Metro Washington’s Leadership Development Program in 2015.
Founded in 1956, Insurance Associates is an independent insurance agency serving the Mid-Atlantic region with offices in Rockville, Fairfax, Laurel, and Towson. We are a locally owned company that prides itself on having one of the most competent, experienced, and tenured workforces of any agency in the area. We advocate for our clients across a diverse range of products and services including Surety Bonding, Commercial Insurance, Employee Benefit Plans, Personal Insurance and Life Insurance.