Baltimore, MD-10/24/16 -- A CSX train carrying Governor Larry Hogan, pictured, and other officials passes through the old Howard Tunnel at the Mt. Royal Station, en route to Seagirt Marine Terminal. Maryland hopes to receive funding to raise the height of this tunnel and nine bridges by two feet so that double-stacked containers can travel on this CSX rail corridor. This will make the Baltimore port more competitive and open up intermodal transport to the midwest. The projected cost for the project is $425 million, and will take four to five years to complete. The 1.7 mile, single-tracked Howard tunnel, built by the B&O Railroad, dates back to 1890 - 1895. Amy Davis/ Baltimore Sun Staff Photographer - #2686
Baltimore, MD-10/24/16 -- A CSX train carrying Governor Larry Hogan, pictured, and other officials passes through the old Howard Tunnel at the Mt. Royal Station, en route to Seagirt Marine Terminal. Maryland hopes to receive funding to raise the height of this tunnel and nine bridges by two feet so that double-stacked containers can travel on this CSX rail corridor. This will make the Baltimore port more competitive and open up intermodal transport to the midwest. The projected cost for the project is $425 million, and will take four to five years to complete. The 1.7 mile, single-tracked Howard tunnel, built by the B&O Railroad, dates back to 1890 - 1895. Amy Davis/ Baltimore Sun Staff Photographer - #2686 (Amy Davis / Baltimore Sun)

Maryland should take advantage of President-elect Donald Trump's interest in infrastructure and push projects that can boost the state's economy, including renovating the Howard Street Tunnel in Baltimore, said Anirban Basu, an economist and CEO of Sage Policy Group.

Structural limitations of the tunnel, which was built in the 1890s and cannot accommodate freight trains with shipping containers efficiently stacked two high, have prevented the port of Baltimore, and Maryland, from reaching their full potential in global logistics, Basu said.

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"It could position Baltimore to be the intermodal player it could be and should be," he said.

Basu's comments followed a panel discussion with economists and bankers at the Maryland Bankers Association's annual economic outlook forum, held Friday at the Baltimore Marriott Waterfront.

Economists expressed a positive outlook for the U.S. economy based on expectations that Trump and a Republican-led Congress will prioritize tax reform and other pro-business legislation.

"We're not taking the assumption that absolutely everything that has been proposed will pass," said Luke Tilley, chief economist at Wilmington Trust, a subsidiary of M&T Bank. "But even with some very watered-down versions of individual income tax, corporate taxes, cutbacks on regulations and some repatriation, we've raised our forecast to 3.5 percent [growth in gross domestic product]."

Jeffrey M. Lacker, the president of Federal Reserve Bank of Richmond, who was expected to speak at the event but was unable to attend because of a family emergency, is forecasting more modest GDP growth of 2 percent in 2017 on the possibility of fiscal policy reform. He expects growth rates to revert to a long-term trend of 1.75 percent in subsequent years, said Kartik Athreya, the executive vice president and director of research at the Federal Reserve Bank of Richmond, who presented Lacker's remarks.

"That said, the real outlook is somewhat more uncertain," Athreya said on Lacker's behalf.

Possible changes in fiscal, regulatory and economic policy could alter that forecast, he added.

Meanwhile, Trump's promise to increase infrastructure spending is an opportunity for Maryland to break free of its middle-of-the-pack economic and job growth, Basu said.

"In an economy that is increasingly about ideas and intellectual capital, you'd expect Maryland to be at the vanguard of job growth, not sitting in the middle," Basu said, "but that's where we are."

A project like the Howard Street Tunnel could set up Baltimore and Maryland for a larger, global role in trade, and create thousands of jobs in the long run, he said.

Gov. Larry Hogan announced in December that Maryland had reapplied for a $155 million federal grant to help expand the tunnel, which is owned by the Jacksonville, Fla.-based railroad CSX.

Basu warned against prioritizing projects because they are shovel-ready. Rather, he said, state leaders must think carefully about what projects could have the greatest impact on long-term economic growth and job creation. He thinks Trump will favor projects with lasting power over those that are simply ready to go.

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