Federal lawmakers last week heard testimony on the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program as part of their exploration of ways to finance President Donald Trump's $1 trillion infrastructure program, according to Engineering News-Record. TIFIA funding is $275 million for 2017, $285 million for 2018 and 2019 and $300 million for 2019 and 2020. Each dollar represents $10 more in loans.
TIFIA loan recipients testified that the program offers better terms and lower interest rates than municipal bonds, making it possible for their infrastructure projects to avoid delays and increased loan costs.
However, the time it takes for the government to respond to TIFIA letters of interest, outreach to rural communities and a credit-rating process that can cost applicants up to $400,000 are some of the program areas that could be improved, former recipients testified.
Although his 2018 budget proposes $1 billion in TIFIA money to spur $140 billion in related loan-based investment, ENR reported, Trump has stressed that private investment will carry out a significant portion of his infrastructure goals. He has said that states rely too much on federal funding and that projects of national import will take priority.
States have already begun to take infrastructure financing into their own hands ahead of an eventual bill that is likely to require them to do just that. Many have initiated gas-tax increases and other fees to pay for the replacement, repair and upgrade of state roads and bridges, Brian Landes, director of location intelligence at Transwestern, told Construction Dive in June.
In April, California legislators approved a 12-cent-per-gallon gas tax increase and the addition of vehicle registration fees to help fund a $52 billion state infrastructure improvement program. The American Society of Civil Engineers says California has a $130 billion backlog of infrastructure repairs, with half of the state's roads in poor condition.
Even if the condition of local infrastructure demands it, getting lawmakers to agree on funding mechanisms for improvements can be a challenge. Gas-tax increase negotiations stalled highway construction projects in New Jersey last summer after Republicans and Democrats struggled to agree to a gas-tax increase that would finance the state's Transportation Trust Fund.
Illinois faced a similar problem more recently, as a state budget impasse required shutting down $3.3 billion in projects. State lawmakers settled on a budget shortly thereafter, overriding Gov. Bruce Rauner's veto on a spending plan that called for higher taxes, The New York Times reported. Illinois had been without a budget for more than two years.