Today the search goes on for new funding options
With diminishing federal funds and shrinking state budgets, state and local governments have had to get creative in how they deliver surface transportation projects. This hearing will focus on those innovative finance tools – such as bonding, tolling, private investment, and federal-credit assistance programs like TIFIA – that help states and municipalities leverage revenue sources to deliver projects.
Today we will hear from our witnesses on which tools work well and which could use improvement. We will also explore how the federal government can better partner with local governments that have raised significant funds and provide assistance to accelerate the construction of transit and highway projects. Innovative financing tools make limited dollars stretch farther.
This Subcommittee continues to work towards a long-term authorization of our surface transportation programs that will provide a significant increase in investment. The Surface Transportation Authorization Act (STAA) will create a well-funded, streamlined and efficient transportation program. Once the STAA is complete, these financial tools will allow us to even more effectively complete projects that will benefit generations to come.
The following is the opening statement of U.S. Rep. John J. Duncan, Jr. (R-TN), Highways and Transit Subcommittee Ranking Member, from today’s hearing on using innovative financing practices to deliver surface transportation projects:
“This is an important hearing for this subcommittee. The reauthorization of the highway, transit, and highway safety programs has been stalled for almost a year now and that is largely due to the fact that we are unable to agree on how we will fund these programs in the future. Tax revenues are declining for all levels of government and everyone is being asked to do more with less. As a result, innovative financing methods will play a bigger role in the next surface transportation reauthorization bill than they have before.
“In the past, innovative financing has been associated with toll road projects. But in recent years transit projects and highway projects that do not include tolls have benefited from innovative financing. Today we will hear about Denver’s Union Station project which will utilize two USDOT loan programs, and we will hear about a tunnel project in Miami that uses innovative financing but does not include tolls.
“As the number of transportation projects that are financed with loans, bonding, or with private sector funding grow, there are important policy issues that must be addressed. We need to make sure that today’s governors and mayors do not leverage so much of their future federal funding that future governors and mayors do not have any federal money available to address the problems they will face.
“At the same time we do not want to give the federal government veto power over every financing decision made by a state DOT or a local transit agency. It will be difficult to strike the right balance between these two perspectives, but I believe that the witnesses today will provide us with valuable information that will help us move in the right direction.”
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