According to estimates from the Federal Highway Administration, local governments invested $53 billion in highway programs raised from local revenue sources, yet that amount does not come close to meeting the needs for investment in roads, transit, bridges, waterways and airports.
While Congress debates the renewal of a national surface transportation program and how to pay for it, local leaders continue to find ways to begin to meet the funding gap. The federal-local partnership is vital to local initiatives and provide local governments with new financing tools.
Among the most effective reforms included in the last surface transportation bill – MAP-21 – was a dramatic increase in funding for a low-interest federal financing tool known as the “Transportation Infrastructure Finance and Innovation Act” (TIFIA) program. President Obama requested that TIFIA funding be expanded to $1 billion in FY 2015 so the program can continue to successfully bolster the financial plans for a number of major highway and transit projects across the United States.
Projects benefitting from TIFIA funding have included Light rail Los Angeles, the Goethals Bridge between New Jersey and New York and public transit in Dallas.
Proponents of a new class of qualified tax credit bonds, called “America Fast Forward” (AFF) Transportation Bonds would build on an initiative already receiving federal credit support. These qualified tax credit bonds are taxable rate bonds issued by state, local or other eligible issuers where the federal government subsidizes most or all of the interest through granting investors annual tax credits in lieu of cash interest payments from the borrower. To date, Congress has authorized qualified tax credit bond programs totaling in excess of $36 billion for forestry conservation, renewable energy projects, energy conservation, qualified zone academies and new school construction.
According to supporters, AFF Transportation Bonds would represent a sixth class of such bonds, targeted at surface transportation capital projects. If enacted into law, AFF bonds will provide more than $45 billion in bond capacity for major transportation infrastructure projects and result in the creation of more than 500,000 jobs for skilled American workers. In Los Angeles, which is advancing a number of projects with significant TIFIA loans, the addition of AFF Transportation Bonds would permit the accelerated construction of more than $15 billion in infrastructure projects. Should AFF Transportation Bonds be included in the next surface transportation bill, the success enjoyed by Los Angeles can be replicated by cities and transportation agencies across the United States.
Maryland Congressman John Delaney has amassed strong support in the House and Senate for the Partnership to Build America Act (H.R. 2084 and S. 1957). Leadership by Rep. Delaney and Sens. Bennet and Blunt would create an American infrastructure fund that would act like a bond insurer or bank for state and local governments to build transportation, energy, water, communication and educational infrastructure. Financed by $50 billion in private bonds, the AIF could finance $2 trillion worth of infrastructure over 50 years, according to sponsors.
Communities also are developing new approaches to tolling as a way to find new revenue. A regional consortium in Austin experienced initial community resistance but eventually found that congestion pricing and enhancements such as bicycle and pedestrian walkways will increased mobility. The addition of these features and new roadways helped the region find the best ways to reduce congestion and serve the community while supporting the local economy.
All these worthy initiatives will help cities build vital infrastructure that finances economic growth, creates jobs and moves people and goods for vibrant communities.