The U.S. Conference of Mayors last week voted to back a resolution by Los Angeles Mayor Eric Garcetti that “urges Congress to create a new category of qualified tax credit bonds to fund $45 billion over 10 years for transportation to stimulate infrastructure investment.”
Not exactly earth-shaking news. But it’s good news nonetheless.
Let me explain. Metro has been pursuing the America Fast Forward (AFF) initiative for four-plus years. AFF includes two parts: an expanded federal loan program and a new bond program.
The loan program — called TIFIA — was expanded by Congress in 2012. TIFIA loans help provide local transit agencies such as Metro with low-interest loans that can be used to help pay for big, expensive projects — and, in fact, TIFIA loans are being used to help finance the building of the Crenshaw/LAX Line, the first phase of the Purple Line Extension and the Regional Connector.
The bond program has been garnering support, but Congress still hasn’t made it part of a multi-year transportation funding bill. In a nutshell: those who invest in transportation bonds receive federal tax credits instead of interest, a good way for investors to lower their tax burden and a good way for transportation agencies to save on interest costs.
Will Congress go for it? Hard to say as partisan politics have prevented Congress from approving of a truly long-term transportation funding bill since a four-year bill was signed into law by President Bush in 2005. That bill expired in 2009, was extended several times and then replaced by a two-year bill in 2012 that expires this year.
Earlier this year, President Obama released a bill proposal that embraced the AFF bond program as well as the TIFIA program. Congress hasn’t exactly embraced the President’s bill but there have been indications of support for the AFF bond program. In the meantime, mayors continue to push Congress to do something, as many cities are trying to expand transit systems and need help financing pricey projects.
As Mayor Garcetti wrote about the Conference, “As gridlock continues to paralyze our federal government, it’s America’s mayors who are increasingly leading the charge to improve quality of life across this country.”