A $9 billion investment from the federal government has helped generate $35.5 billion worth of work to highways, bridges, tunnels, transit and rail since 1999 according to a recent report on a federal loan program known as TIFIA. While innovative financing may help get the job done, truckers have hang-ups when the program is used to subsidize public-private toll roads.
TIFIA, which stands for Transportation Infrastructure Finance and Innovation Act, is administered by the Federal Highway Administration. The scope is to provide credit assistance in the form of direct loans to states and agencies to complete significant transportation projects.
An overview report released this month shows that more TIFIA projects of late involve tolling as the preferred source for repayment of the loans.
Recent awards in April have included a $415 million loan for a public-private toll road in Fort Worth, TX, called the North Tarrant Express, and a $422 million loan to reconstruct the Midtown Tunnel system and rehab existing tunnels in Norfolk and Portsmouth in Virginia.
As part of the Texas and Virginia projects and others, the TIFIA loans help guarantee low borrowing rates for the agencies doing the work and help keep out-of-pocket costs down.
Truckers who pay the tolls worry about where their money goes, especially when a percentage of the toll revenue is set aside to guarantee profit for the project investors.
“The number one guarantee in a public-private partnership is that the private entity makes a profit,” says OOIDA Director of Legislative Affairs Ryan Bowley.
“TIFIA doesn’t always mean toll road, but unfortunately that’s the direction the department has gone in recent years.”
An example of a beneficial TIFIA project that did not involve tolls was the Cooper River Bridge completed in 2000 in South Carolina. In that project, the $215 million loan was paid back through local option sales taxes and other means.
“When you do those kinds of projects, TIFIA comes out as a pretty good deal not only for the jurisdiction but for the taxpayer because it allows the agency to move forward with a project now at a relatively low interest rate and pay it back over time,” said Bowley.
Unfortunately, he says, TIFIA is being used more and more to support public-private toll roads.
“There’s a growing tendency to look towards toll revenues to be the repayment method for the loan,” he said.
TIFIA has become a buzzword in DC of late as lawmakers discuss ways to speed up project delivery and cut red tape.
Congress is considering a provision in its surface transportation authorization bill to provide more seed money for the TIFIA program.
In February, the Federal Highway Administration reported an “overwhelming demand” for TIFIA assistance after sending out requests for participation. According to the administration, 26 states requested $13 billion in TIFIA loans, underscoring the need for transportation investment.
“The program offers an additional finance option to states to meet transportation needs at a time when funds are lacking,” FHWA Administrator Victor Mendez said in a statement.
Getting to know TIFIA could help truckers have meaningful dialogue with their lawmakers about infrastructure and tolling, Bowley says.
“The original design for TIFIA was for states to leverage transportation funding from other things like local option sales taxes and things like that,” he said. “Unfortunately, it is viewed now as a way to advance toll projects and PPPs.”
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