President Obama’s “Rebuild America Partnership” includes a national infrastructure bank that would fund a lot more than just roads and bridges. If it comes to fruition, an infrastructure bank would lend money for intermodal projects, ports, pipelines, power grids and schools.
The president announced details of his infrastructure plan during a visit to the Port of Miami on Friday, March 29. He first unveiled the plan during his State of the Union speech earlier this year.
The Port of Miami site is significant because of a $663 million tunnel being built to reroute port traffic away from downtown. Nearly 4,500 trucks use downtown roads each day to access the port according to a project overview. Construction began in 2010, and the tunnel could open in May 2014.
Obama touted the public-private agreement that is fueling the tunnel project, adding that “we can do this all across the country.”
The Port of Miami Tunnel will not be tolled, but tolls remain a principal funding method for many public-private partnerships.
Rebuild America calls for $10 billion in startup money for the infrastructure bank. The fund would attract private sector investment by guaranteeing loans for projects of regional or national significance.
Projects financed by the infrastructure bank will not be limited to roads, bridges or tunnels for road traffic.
“It’s a partnership with the private sector that creates jobs upgrading what our businesses need most – modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children,” Obama stated while in Miami.
Highway users – including truckers, who pay fuel taxes, tolls and other user fees to operate on America’ infrastructure – are concerned about the project-specific nature of the national infrastructure bank in an era in which the Highway Trust Fund does not have enough money to last through 2014.
“We certainly appreciate the president’s continued focus on infrastructure issues,” said Ryan Bowley, director of legislative affairs for the Owner-Operator Independent Drivers Association. “He’s brought a lot of attention to the challenges we’ve faced out there. But what we need from the perspective of highway users is a long-term solution to the funding shortfall that the Highway Trust Fund is going to have in the years to come.”
Bowley said highway users have a reason to be concerned that they’ll be asked to pay more for infrastructure in the future, but the money may not stay with highways.
“Whenever you lump a bunch of other infrastructure areas together under one big umbrella, highways run the risk of being a piggy bank out there,” Bowley said.
He cites New York as an example. Toll payers in the Empire State fund subways, canals and other infrastructure. New York toll payers also fund economic development. including the redevelopment of the World Trade Center site.
“Unless it’s done right, you run the risk of one area, such as highway users, subsidizing another area,” Bowley says.
So far, President Obama’s proposals for a national infrastructure bank as well as infrastructure bonds and the U.S. Department of Transportation’s TIGER program do not use federal Highway Trust Fund dollars. TIGER stands for Transportation Infrastructure Generating Economic Recovery. It uses general funds.
The federal TIFIA loan program, also touted by the president during his speech in Miami, is administered through the Highway Trust Fund, however. TIFIA stands for the Transportation Infrastructure Finance and Innovation Act. It has been on the books for 13 years, but got a funding boost in the latest highway bill known as MAP-21, Moving Ahead for Progress in the 21st Century.
Neither TIGER nor TIFIA are required to fund highways. Both have been used to fund rail and intermodal projects.
Lastly, another part of the president’s plan stemming from MAP-21 is the issuance of America Fast Forward bonds, modeled after the Build America Bonds program of 2009. A White House press release says the Build America Bonds helped support $181 billion for public infrastructure since 2009.
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