How Would the Trump Infrastructure Plan’s Rural Formula Work?

February 23, 2018

The second-largest program proposed by the Trump Administration’s long-awaited infrastructure initiative is $40 billion in block grants for infrastructure improvements in rural areas, with almost no federal strings attached, to be spent in rural areas at the discretion of the state governor.

While the outlays (cash flow leaving the Treasury) for most of the rest of the $200 billion plan would trickle out slowly over the course of the next decade, the White House budget office estimates that all $40 billion of the rural formula money would be transferred from the U.S. Treasury to state covers immediately, in fiscal year 2019. Which is, you might note, before the 2020 Presidential election.

Rural areas, of course, tended to vote solidly Republican in the 2016 election, and the rural-urban divide has grown more and more politically polarized in recent election cycles. (The Census Bureau recently put out a good explainer document about how it determines if an area is rural or not.)

But which states would get which share of that $40 billion?

Here is all that the White House document says about the rural formula:

The statute would create a “rural formula,” calculated based on rural lane miles and rural population adjusted to reflect policy objectives. Each State would receive no less than a specified statutory minimum and no more than a specified statutory maximum of the Rural Infrastructure Program formula funds, automatically.

Note that the document does not say what weighting to be given to rural population versus rural lane-miles versus other mystery weighting “to reflect policy objectives.” And it does not specify what the state minimum and maximum share should be. Those would be left up to Congress.

However, it’s fairly easy to pull up the most recent Census data on rural population (from 2010) and the Federal Highway Administration’s table of rural lane-miles by state (from 2016) to get a sense of what the formula factors are. We ran a simple table that weights rural population and rural lane-miles equally (50-50) and does not have any state minimums or maximums, just to see what the starting-off point is.

The full-page table showing all 50 states is here.

Under this 50-50 scenario with no minimums and no maximums, here are the states that would get the largest and smallest shares of the $40 billion in rural formula grants.

Five largest:

Texas $2.70 billion
North Carolina $1.53 billion
Michigan $1.42 billion
Pennsylvania $1.41 billion
Ohio $1.37 billion

Five smallest:

Alaska $168.0 million
Delaware $70.9 million
Hawaii $48.3 million
Rhode Island $42.1 million
Distr. of Col. Zero

Texas is going to be the clear winner no matter how you change the relative weighting of rural population and rural lane-miles – since the Lone Star State has 6.5 percent of the total rural population and 7.0 percent of the rural lane-miles, their overall share can’t go very far upwards or downwards. Number 2 North Carolina, on the other hand, has 5.4 percent of the rural population but only 2.2 percent of the rural lane-miles, so they would do better under a formula that gave greater weighting to population.

Before the highway formula programs ceased to be about anything except gasoline tax payments, there were state minimum shares of total funding for certain programs. Each state was guaranteed no less than a half-percent of total Interstate, NHS, and CMAQ funding each year, and no less than a quarter-percent of bridge funding. A half-percent of $40 billion would be $200 million which would bring those five smallest states up and drag everyone else down a bit (though allowing DC access to the rural money would be problematic since they would also have to get a waiver from the rule that the money be spent in rural areas, in which the District is completely lacking).

The question of whether or not to weight population and lane-miles equally looms large when you look at per-capita funding. Low-population states with lots and lots of lane-miles would get some phenomenally high per-rural-capita shares of the $40 billion under a 50-50 weighting scenario with no other factors. Here are the top five state per-rural-capita numbers:

North Dakota $2,477
South Dakota $1,869
Nevada $1,744
Nebraska $1,551
Kansas $1,522

The lowest per-rural-capita take under this scenario would be Massachusetts at $421. (If you give each state a half-percent minimum share, then Rhode Island would come in second on the per-rural-capita calculation, since that $200 million would have to be divided by the 97,524 rural dwellers in Rhode Island to get $2,051 per-rural-capita.)

Thanks for reading this week’s edition of “J.D.’s Fun With Microsoft Excel.” Until next time…

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