4/29/2008US Senators Propose Alternatives to Tolls
US Senators propose using special bonds to raise money for transportation infrastructure projects.
Members of the US Senate have proposed a potential alternative to the use of tolling to boost public spending on transportation infrastructure. Senators John Thune (R-South Dakota) and Ron Wyden (D-Oregon) last week sought to gather support from US Department of Transportation officials for the Build America Bonds Act. The legislation would allow states to fund various types of infrastructure project through the issuance of thirty-year bonds.
"The studies show that there is a $1.6 trillion backlog of funding needs in the highway system in this country that's not being met," Thune said at the bill's introduction in September. "So what our bill would do is create a supplemental revenue source -- $50 billion of additional funds -- that can be used by the states to address those critical and high-priority needs they have in the infrastructure system across this country."
The legislation authorizes two or more states to join together to create a Transportation Finance Corporation to issue "Build America" bonds for the states' choice of transportation project without federal limitation. The five-year authorization would allow up to $10 billion in bonds to be issued per year.
"As a former Secretary of Transportation, I know how vital it is for states to have adequate transportation infrastructure," said Senator Elizabeth Dole (R-North Carolina), an original co-sponsor of the proposal. "Increased funding for our roads, bridges, railroads and waterways directly translates into economic growth and more jobs."
According to the American Association of State Highway and Transportation Officials, there are 3,027 projects in 46 states that are ready to proceed within ninety days of receiving funds. The total cost of these projects would be $17.3 billion, but most of those specifically identified involve mass transit.
Thune and Wyden introduced their bill in September based on the 2003 Build America Bonds Act which failed to generate significant support among senators. The latest version of the bill includes a newly added provision designed to entice tolling advocates in the Department of Transportation into lending their support. The bill allows the bonds to be used to, "stimulate public and private investment in transportation infrastructure."
A full copy of the legislation is available in a 75k PDF file at the source link below.