Debt Financing

The Carnegie Endowment’s Leadership Initiative on Transportation Solvency has a new report out this month that suggests a five percent ad valorem tax on oil up-stream and gas downstream could help cover the cost of transportation in the United States. Meanwhile, reaction to the transportation authorization proposal offered last week by House Republicans continued to pour in this week from transportation stakeholders and other interested observers. Plus there is news this week on Georgia’s regional transportation referendum and an anti-toll initiative in Washington state. And the first post-moratorium public-private partnership transportation project in Texas has attracted a lengthy list of potential suitors.

It appeared to be a promising development last week when Democratic Sens. Barbara Boxer and Max Baucus and Republican Sens. James Inhofe and David Vitter released a joint statement citing “great progress” and “common ground” on a new transportation authorization bill. But there is already significant skepticism that Boxer and her colleagues can deliver a promised six-year bill that would allow state and local leaders around the country to fund long-term transportation projects going forward. And as usual, there is no shortage of opinions on how changes in federal and state policy might help the nation better address its infrastructure needs.

New reports out in recent weeks detail how the United States is falling behind other countries in infrastructure improvement, offer “taxpayer-friendly” solutions for the nation’s transportation challenges, explain how highway infrastructure spending is connected to the larger U.S. economy and examine tax provisions for financing infrastructure. Here’s a rundown.

Last week I had the opportunity to attend a forum outside Washington, D.C. entitled “Changing the Conversation: Advancing a National Infrastructure Improvement Agenda.” The American Society of Civil Engineers, the American Planning Association and other organizations brought together nearly 100 attendees from the business, academic, government, advocacy, public utilities, transportation, planning and research communities to discuss what might be needed to overcome significant communication barriers and make the case for infrastructure investment in the United States. Here’s a rundown of some of the ideas I heard at the meeting, as well as some worthwhile links to the resources of some of the organizations seeking to move the dialogue forward.

I’ve blogged before about how the governors of New Jersey and Virginia, both elected in 2009, are tackling transportation issues in their respective states. Now, Chris Christie and Bob McDonnell are back in the news this month with ambitious transportation plans. Meanwhile, newly elected Kansas Gov. Sam Brownback is proposing tapping transportation funds to prop up other government programs in his state budget. And as other states seek ways to finance improvements to their own transportation systems, a number of recent reports and developments put the focus on such mechanisms as public-private partnerships, congestion pricing and tolling.

We have a new Capitol Facts & Figures policy brief out today that attempts to survey this year’s State Transportation Finance Legislation and Trends. As mentioned in the brief, Georgia was one state that managed to make a name for itself this year in transportation finance. It did so with a plan that at first glance seemed to both kick the can down the road and pass the buck. But the plan could be the path many cash-strapped and tax increase-averse states choose to follow in the years ahead. And, although their plan isn’t designed to come to fruition until after the 2012 election, Georgia may be able to learn some things from transportation-related ballot measures other states will consider this November.

While the election, the economy and other factors made it a difficult year to raise new state revenues for transportation, 2010 saw states turning to bonding as a key financing strategy. Interest in public-private partnerships remained high. States also explored alternative finance mechanisms and revenue streams. But one state's regional approach to transportation funding could be what 2010 is ultimately remembered for.

“Armageddon on Colorado ballots” proclaimed the colorful headline of a Denver Post editorial this week. The doomsday concern is in reference to three ballot measures Colorado voters will consider this November that may be reflective of the anti-tax, anti-spending, anti-borrowing, anti-big government sentiments among the electorate this fall but that could go a long way in determining whether the state has any money in the future to do important things like build and maintain roads.

E-newsletter Issue #48 | June 10, 2010


It’s been a difficult year for transportation finance at the state level. Legislation reauthorizing federal transportation programs is not expected from Washington until next year.

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