A look at Infrastructure

Conventional wisdom in the Beltway, among pundits and in the media is that the Infrastructure bill will follow Tax reform.

However, the House and Senate Tax bills which just came out deal directly with the financing of Infrastructure.

This fact is not surprising, because a good deal of Infrastructure is financed through the tax code.

While the House bill shuns market approaches to infrastructure, the Senate bill promotes an approach that leverages scarce federal tax-payer dollars to bring in outside money from states, local governments, and private investors.

Much of this happens through the promotion (Senate) or doing-away-with (House) of what are called private activity bonds. These are simply a way of financing private infrastructure where the federal government pays less than 30 cents on the dollar for projects.

These bonds finance water, transportation, bridges, solid waste, as well as social infrastructure like cultural institutions, educational institutions, housing, and other areas.

When the State of Pennsylvania sought to fix 558 structurally deficient bridges, it deployed these private activity bonds in a way that brought federal, state, and private money to the table.

Examples big and small abound. These bonds are ingrained in so many aspects of our communities and serve them well, promoting basic health and well-being, economic growth and opportunity, and also jobs.

The broader approach of leveraging scarce federal dollars to get projects built through state, local and private money is the signature Trump approach.

Except at the political extremes, it enjoys broad based bipartisan approach. And, even those at the political extremes are not adverse to making exceptions. Even, politicians who succumb to doctrinaire politics at times, support these bonds when water pipes break and schools crumble. Massachusetts and Vermont use them.

I won’t bother you with boring details, but other provisions like the end of the SALT exemption will impact upon school facility financing and additional infrastructure areas, as will things like advanced refunding of bonds, and others.

Importantly, the removal of the Alternative Minimum Tax will have a very positive impact upon private activity bonds.

It is surprising that we do not call the Tax bill also an Infrastructure one.

More to follow as the House and Senate seek to reconcile and duke it out on key Infrastructure provisions within the tax code.

If you would like additional information or if I can be of assistance thinking through how these changes impact upon your own institutional plans, please do per usual be in touch.


Michael Likosky
Infrastructure Head, 32 Advisors
212-607-2450 (w)
646-685-1792 (c)


Michael Likosky is a principal and head of Infrastructure at 32 Advisors. He holds a JD and DPhil (Oxford Law).

Michael is an expert on infrastructure, oil and gas, mining, free zones, human rights, foreign investment, and high technology growth strategies.

He has published five books in these areas including three with Cambridge University Press. His most recent book, Obama’s Bank: Financing a Durable New Deal, looks at the Obama Administration’s approach to public-private partnerships. His other books are: Law, Infrastructure and Human Rights; Privatizing Development; Transnational Legal Processes; and The Silicon Empire.

Michael is an Expert to the Clinton Global Initiative, the OECD, and the United Nations Conference on Trade and Development.

Michael co-chaired California Governor Edmund Brown Jr’s Task Force to Modernize the CA Infrastructure and Economic Development Bank, the country’s oldest infrastructure bank with over thirty-two billion dollars lent out to-date. Likosky is a regular contributor to the World Investment Reports, Oxford Amnesty Lectures, and Trade and Development Report.

Michael’s work has been supported by Ford Foundation, Rockefeller Foundation, Arts and Humanities Research Board, Surdna Foundation, Markle Foundation, Chatham House, and others.

Michael advises public officials, private investors, pension plans, and inter-governmental organizations. Likosky has advised US Treasury; US Senators John Kerry (then), Charles Schumer, Kirsten Gillibrand, Cory Booker and Bill Nelson; US Representative Rosa De Lauro; California Governor Edmund Brown Jr.; New York State Empire State Development Corporation; New Jersey Governor Christie; CA Business Transportation and Housing Agency; CA State Infrastructure and Economic Development Bank; the cities of Chicago and Newark; D. E. Shaw; Deutsche Bank; Credit Suisse, McKinsey; Goldman Sachs; Standard and Poor’s; broadcasters (ABC, CBS, NBC, ESPN), International Development Law Organization; the capital stewardship programs of SEIU, AFT, UFCW, and LiUNA, and others.

Michael has published opinion pieces and appeared in outlets such as New York Times, New York Times Deal Book, Wall Street Journal, CNN Money, Bloomberg, Associated Press, Reuters, Bond Buyer, American Banker,

Michael founded and directed NYU’s Center on Law and Public Finance and was a Senior Fellow at the Institute for Public Knowledge, was Professor of International Economic Law at the School of Oriental and African Studies, University of London, and has held fellowships and visiting posts at Oxford Law, NYU Law, Fordham Law, Wisconsin Law, and the University of Bonn.

Since 2008, Michael has convened the Reinvesting in America Series often in partnership with OECD, Partnership for NYC, Clinton Global Initiative, Citizens Budget Commission, Debevoise & Plimpton, Shearman Sterling, British Telecom, and Hogan Lovells. It features members of Congress; public officials from US Treasury, Defense, Transportation and Commerce; as well as state officials. The series includes small off-the-record discussions and large public events. It alternates between New York and Washington DC

Michael Likosky
32 Advisors

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