Villaraigosa, Mayors Push for Feds to Expand Transportation Lending
The Los Angeles mayor warns localities to be strategic in their requests given that funding may be hard to come by this year.
Los Angeles Mayor Antonio Villaraigosa is asking mayors across the country to sign a letter to congressional leaders urging the expansion of programs that help local governments finance transportation projects.
Future transportation projects will see federal money being leveraged to spur state and local spending, Villaraigosa said, and it's important for localities to show Washington "we're making our own investments" as opposed to simply asking for money.
Villaraigosa, who spoke at the U.S. Conference of Mayors meeting in Washington, D.C., said that it's important to do everything possible to invest in transportation projects since they are so closely tied to job growth. "There's nothing more important than this issue of transportation," he told his colleagues.
The letter, which he intends to deliver next month to the chairmen and ranking members of several congressional committees, advocates for the expansion of the Transportation Infrastructure Finance and Innovation Act program (TIFIA) in the new surface transportation bill.
TIFIA provides federal loans, credit lines and loan guarantees to help finance transportation projects being pursued by state and local governments, as well as private entities. The program is especially useful to large-scale projects that might otherwise be delayed due to uncertainty over the timing of their revenues.
TIFIA can also give the project sponsor better access to capital markets, more flexible repayment terms and better interest rates, according to the U.S. Department of Transportation (DOT). The program has provided $7.7 billion in credit assistance to 21 projects that cost a total of $29 billion.
But TIFIA can't provide aid until a project is shovel ready, which has prevented some transit agencies from taking full advantage of market conditions. The U.S. Conference of Mayors has asked Congress to modify the TIFIA program to allow DOT to make credit commitments earlier in the development of a project.
Villaraigosa's letter also advocates for the creation of a Qualified Transportation Improvement Bonds program, which would reimburse interest costs for some state and local governments that finance their transportation projects.
Villaraigosa's proposals were underscored by remarks made by Jim Tymon, staff director of the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee. Tymon said early indications suggest that those pursuing transportation expansion will have to "live within our means" and won't be able to tap more funding than what's already available in the Highway Trust Fund, which has sometimes been depleted and bailed out in the past.
He endorsed the TIFIA program and said states and localities are going to have to find creative sources of financing as federal funding dries up. "Our biggest hurdle is probably going to be on the finance side," Tymon said of the challenges facing the creation of a new transportation bill.
Since localities are increasingly being asked to do more with less, Villaraigosa supports the financing mechanisms as a way for the federal government to leverage its money.
Speaking to mayors Wednesday, Villaraigosa emphasized the need for them "to be strategic in our requests" given the fact that the federal government can no longer be relied upon as a reliable source of funding for big transportation projects. The letter notes that the need for transportation construction is essential, given that projects can help bring jobs -- and taxes -- to communities.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
The Week in Public Finance: Public Pensions Edition2 days ago
Low Oil Prices Drain Some But Energize Most Local Economies2 days ago
Missouri Auditor Dies in 'Apparent Suicide'2 days ago
Border Surge Hampering Policing in Other Parts of Texas2 days ago
81,000 Ohioans to Lose Medicaid Coverage2 days ago
Scott Walker Says Union Protesters Prepared Him for Fighting Islamic Terrorists2 days ago