LA looks to $600M in federal bonds to finance infrastructure
- Louisiana plans on using $600 million of Grant Anticipation Revenue Vehicle (GARVEE) bonds to finance critical highway projects, according to the Associated Press.
- Proceeds from the GARVEE bonds are backed by 12 years of future federal money the state expects to receive, but local governments will also help pay off the bond debt. A state Republican-led effort to tap $500 million of additional highway construction funds via an increase to the state gas tax failed to gain traction with lawmakers last year.
- State transportation officials expect the necessary approvals and environmental reviews to be complete by the end of the year, with construction scheduled to starts soon thereafter. Shawn Wilson, Louisiana's state transportation secretary, called the work "the tip of the iceberg," as the state currently has a $13.9 billion backlog of road and bridge work.
West Virginia is also using about $260 million of GARVEE bonds to help finance a $2.8 billion state infrastructure repair and upgrade program. The bonds will pay for 13 interstate projects and 18 bridge replacements. After closing on the GARVEE bonds, the state plans to sell $500 million of Parkway Authority bonds, with the first issue of $100 million scheduled for this spring.
Idaho transportation officials, according to The Spokesman-Review, are also using $150 million in GARVEE bonds to help pay for the widening of Interstate 84, along with other highway improvements.
GARVEE bonds are backed by grants under the broad Federal-Aid Highway Program, which includes the Highway Trust Fund (HTF). Taxes that fund about 90% of the HTF — gasoline, 18.4 cents per gallon and diesel fuel, 24.4 cents per gallon — haven't increased since 1993. According to a 2013 report, increased fuel efficiency is one of the factors that has reduced money going into the HTF.
As the Trump administration prepares to unveil the details of its $1 trillion infrastructure plan, part of the conversation between the White House and lawmakers have turned to ways to beef up the HTF, which, according to the Congressional Budget Office, could go broke within the next 10 years. Although the prospect of a gas-tax increase was shot down by Senate Minority Leader Chuck Schumer (D-NY).
However, the Trump administration, according to Transport Topics, could still be considering a gas-tax increase as a way to create a more reliable funding source for the HTF.
- Associated Press $600M in Louisiana Interstate Projects Moving Toward Reality
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