Bill Would Provide States With Greater Flexibility and Control of Highway Financing; Would Lift Limit on Current Program Caps
WASHINGTON–(ENEWSPF)–February 28, 2014. U.S. Senators Mark Kirk (R-Ill.) and Mark Warner (D-Va.) yesterday introduced the Highway Innovation Act of 2014, which would provide states with greater flexibility and control of highway financing. This bill would give states and regions broader flexibility to ensure they have the tools necessary for the long-term funding of our nation’s transportation system.
“As Congress and state governments search for solutions to address our massive infrastructure backlog, we should look to our own history to help solve the problem,” Senator Kirk said. “President Abraham Lincoln tapped private investment to build one of our nation’s greatest transportation feats – the transcontinental railroad. In the same way, Congress should not stand in the way of states looking to use innovative financing to mobilize private investment to meet growing transportation needs. The Highway Innovation Act of 2014 gives state leaders the flexibility they need to make sorely needed transportation system improvements.”
Without a sustainable new source of revenue, the Congressional Budget Office predicts the Highway Trust Fund will be insolvent by 2015. Enhancing the opportunities for private-public partnerships and financing mechanisms like tolling and private activity bonds would offer innovative ways to finance transportation and infrastructure projects without putting additional strain on the federal government.
The Highway Innovation Act of 2014 lifts the limited number of states that are eligible to participate in the Value Pricing Pilot Program (VPP) and the Interstate System Reconstruction and Rehabilitation Pilot (ISRRPP) Program. The VPPP program currently holds a 15-state limit, and the ISRRPP has only a three slot limit. This Kirk-Warner bill would increase the state availability for ISRRPP to 10, and would completely lift the 15-state limit on VPP, giving states the tools they need to effectively address their infrastructure challenges. According to the Federal Highway Administration, the 15 slots in the VPPP program are completely full – seven of which are permanently reserved. Additionally, all three slots in the ISRRPP program are full as of January 2014 for projects in North Carolina, Virginia and Missouri.
Senator Kirk today also introduced another piece of legislation that would increase the national limitation amount for highway private activity bonds. With a tax exempt status, these bonds can serve as alternative sources of low-cost financing. Building and maintaining a robust transportation network is critical in order to keep our nation’s economy moving, and innovative financing can address a piece of our funding needs. Easing restrictions on public-private partnerships across all sectors for transportation development present new opportunities for modernizing our public infrastructure, strengthening our national transportation networks and alleviating congestion without adding to our national deficit.