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.
Categories: America Fast Forward, Measure R, Policy & Funding, Projects
Some of the money should indeed be used to invest in things that will bring in more revenue stream for Metro.
There’s a reason why gas stations across the nation have convenience stores. Of course it costs Shell and Chevron money to put in stores there that sell bottled water and simple snacks. It costs them money to maintain restrooms as well. But they do it because it makes sense; these things or services are things that people would be willing to pay for which bring in additional revenue for these companies.
If gas stations have services, train stations should be no different.
[…] More on America Fast Forward nee 30/10 (The Source) […]
The people of Los Angeles pay Federal taxes, and extrapolating from the net donor status of the state of CA, they pay more than their share. Rather than a bailout, its OUR money.
The main point is that these are still in the end, coming from tax dollars from all Americans.
We should not expect that Uncle Sam will keep bailing out LA’s transportation financial woes forever.
The best thing to do is to start figuring out ways to lessen the financial burden to taxpayers by finding new revenue sources. That’s the least we can do to say thanks for helping us out.
What ways can LA Metro use these sources to increase our own revenue source? Can we use some of this money to help our dumb flat rate policy towards a more fairer distance based fare infrastructure system? Maybe use $20,000 per each existing station to upgrade the stations with retail spaces, restrooms, etc? Start converting some of the free park-and-ride lots to paid lots? We need revenue.
Otherwise, LA will be no good than those countries we give financial aid to who they all have no intent on paying us back.
It is pretty exciting to see this local priority make it through to federal law. I’m curious to know more about the scale, though. I know we should be glad to get what we got, but the lending authority made available through TIFIA seems rather small, given that it’s intended to cover all 50 states and in LA County alone we’ve got $40 billion of Measure R projects lined up. It seems that if we’re going to condense that spending into 10 years, we’d need an average of $4 billion a year.
Do I have this right? Are there other parts of the new law that add to the available amount, or is Metro hoping that future transportation bills expand the TIFIA financing even further?
The first thing to keep in mind is that every dollar that the feds make available is good for about $10 in loans. The second thing to keep in mind is that Measure R isn’t all transit projects. Some money goes into operations, local return to cities. Metro is looking to use TIFIA to help accelerate a few of the transit projects, which hardly amounts to $40 billion. The staff report in the post has the exact money amount. As for Metro, it all comes down to how competitive the agency is when applying for the loans.
You raise an excellent point about the length of the bill. I think that all transit agencies wanted something longer to supply more certainty about long-term transportation funding. But two years is a good start and now that TIFIA has been expanded, perhaps there’s more impetus for Congress to do the same beyond 2014.
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