GARVEE bonds sought for Vermont roads

| 1/7/2005

A Vermont state senator has offered legislation to borrow money from grant-anticipated revenue vehicle bonds to pay for road work.

The bill, introduced by Sen. Dick Sears, D-Bennington, would authorize the state treasurer to borrow money through the special class of bonds – commonly known as GARVEE bonds – to help finance transportation projects such as the Bennington Bypass. But the idea is meeting resistance from state officials, he said.

This federal program allows the state to sell bonds to pay for road work. The sale is based on the assumption that federal funding in future years would pay off the bonds. This allows the state to get money needed for the project up front.

In the past, other legislators have said they were leery of borrowing in anticipation of revenue from the federal government.

That may change, Sears said.

“I think when people start seeing how tight the budget is they’ll start to look for alternatives before they start cutting their own projects,” he told the Bennington Banner. “People are going to start to see that there’s not a lot of money around.”

Sears’ bill is S1.