As many of you know, President Obama last week signed a two-year federal transportation spending bill. In recent decades, Congress has usually approved bills that cover more years but in these hyper-partisan times, and after nine extensions of the bill that expired in 2009, this definitely was a victory.
In addition, the bill contained part of the America Fast Forward program that has been created by Los Angeles Mayor Antonio Villaraigosa and backed by the Metro Board of Directors for the past couple of years.
America Fast Forward (pdf) originally called for expansion of both a federal bond program called QTIB and a federal loan program called TIFIA. The bond part of the program didn’t get traction in Congress — it involved some serious federal spending — but a hefty increase in TIFIA did make it into the bill. And that’s good news for Metro and transit agencies across the land who want to borrow money to build projects now rather than wait years or decades.
In particular because the bill greatly expanded the federal TIFIA program that provides loans, loan guarantees to local transportation projects around the country at competitive interest rates (today’s interest rate is 2.63 percent for a 35-year loan, by the way). As the TIFIA website puts it, “Each dollar of Federal funds can provide up to $10 in TIFIA credit assistance – and leverage $30 in transportation infrastructure investment.”
It also should be noted that TIFIA is part of the strategy that Metro staff wants to use to accelerate projects if, in fact, a Measure R extension makes it to the ballot this fall. Here’s the staff report that explains it. TIFIA doesn’t guarantee that any particular transit agency will receive loans or loan help — agencies have to apply — but the expansion of the program is an option that certainly was not on the table previous to this.
A few other key points about the new transportation bill from Metro’s government relations staff:
•The legislation signed into law includes an innovative finance section entitled America Fast Forward that includes $1.7 billion in lending authority through the Transportation Infrastructure Finance and Innovation Act (TIFIA) program ($750 million in Fiscal Year 2013 and $1 billion in Fiscal Year 2014).
•In addition, the TIFIA program is substantially reformed in ways that reflect our agency’s America Fast Forward initiative. The conference report shares that the America Fast Forward program will “help communities leverage their transportation resources and stretch Federal dollars further than they have been stretched before.”
•The America Fast Forward initiative was endorsed by our Board of Directors. MAP-21 keeps funding for federal highway programs at current levels with a small inflationary adjustment. In addition, the bill includes language that will serve to streamline the federal New Starts program, which has been an issue advanced by our agency with Members of Congress and the Federal Transit Administration. The bill also provides for expenditure authority through September 30, 2014, after which time Congress will need to adopt a new surface transportation bill or extend MAP-21.