ROANOKE- Governor Bob McDonnell previewed components of his transportation agenda for the 2011 General Assembly session today in a wide-ranging speech delivered at his Governor’s Transportation Conference in Roanoke. The Governor’s overall transportation vision focuses on maximizing all available resources and programs to get projects initiated during one of the most favorable road building periods in Virginia history. The Governor’s proposals, when fully implemented, would pump $4 billion into road, transit and rail projects in the Commonwealth over the next three years, dramatically speeding up congestion-reducing efforts and increasing job-creation and economic development efforts statewide
Highlights of the Governor’s transportation proposals:
Direct $150 Million to transportation from budget surplus. These one-time funds will go to the Virginia Transportation Infrastructure Bank.
Pass a constitutional amendment to permanently protect the Commonwealth Transportation Fund from transfers to the General Fund.
Create “Virginia Transportation Infrastructure Bank” (VTIB) to multiply transportation dollars.
Capitalize Bank with $150 million from surplus and $250 million from audit-identified funds; Goal is to provide an initial $400 million and $1 billion total during administration.
Modify Virginia Code to authorize Direct GARVEE bonds. This would allow the Commonwealth to issue at least $1.1 billion in direct GARVEE bonds and utilize toll credits for state match.
Accelerate the sales of bonds from 2007 transportation legislation to max of $600 million per year, providing ability to issue up to $1.8 billion in bonds during remainder of the Administration. For every $100 million spent on highway construction, it is estimated 3,000 jobs are created or supported.
Increase the availability of Revenue Sharing, specifically eliminating the $1 million cap per project and $50 million program maximum.
Speaking about these proposals at the Transportation Conference the Governor noted, “I want to make clear, right now is the best time in modern Virginia history to get new roads and bridges built. First, construction prices have fallen dramatically due to competition and the state of the economy. Second, interest rates are at historic lows for our AAA bond rated state. Third, our citizens need the good jobs that will come with these projects. Fourth, we need to reduce congestion and build transportation infrastructure today. We need to get dollars out the door quickly, and road, transit and rail projects underway now. Leveraging our scarce transportation resources to make them go further is smart management.”
The Governor continued, “Over the past two decades state support for transportation has not kept up with our growth as a Commonwealth. This has led to more congestion, longer commutes and missed economic opportunities. That trend must be reversed, and this is the time to do it. We have already, in just the first six months of this fiscal year, advertised almost double the amount of road work as during this same time period last year. By putting $4 billion into transportation over the next three years we will continue that progress, and get more Virginians back to work in the process. There is nothing partisan about road building. There are not Republican or Democratic roads. I hope that Republicans and Democrats will come together to back these responsible, and necessary, portions of our transportation plan. We can’t solve all of our transportation challenges all at once, but we can take significant steps forward over time. These portions of our plan are one of those steps, and implementing them will create good new jobs for our citizens today.”
Secretary of Transportation Sean Connaughton added, “In this kind of construction climate there is no acceptable reason to not get every possible resource deployed to transportation projects. We are getting deals now that would have been unheard of just a few years earlier, and the interest rates are at historic lows. This package will get projects underway, and Virginians will see the results all across the Commonwealth. In particular, the Virginia Transportation Infrastructure Bank has the potential to revolutionize how projects are funded and moved forward in our state. Now, public and private sector entities will have a resource they can utilize to build projects that have previously not been funded, or underfunded. These transportation proposals are designed to speed up projects, and to maximize taxpayer dollars to the greatest extent possible. It will play a major role in driving the economic vitality of Virginia and getting our citizens back to work.”
Facts about the: “Virginia Transportation Infrastructure Bank”
Initially, the Bank would be capitalized with $250 million of audit-identified funds, and $150 million from the budget surplus.
Additional deposits will come from other sources, including future budget surpluses.
The Bank will provide an initial $400 million now and $1 billion total during this administration.
It will have a revolving loan fund for low interest rate loans and grants to localities, transportation and transit authorities, and private sector partners.
It would be able to leverage three to five times the amount of funds deposited into it.
Through grants, low interest loans and loan guarantees local governments can use the Bank to get their projects that have been not funded or underfunded in the current 6 year improvement plan.
Examples of local projects that would be candidates for funding from the Bank are Dominion Boulevard in Chesapeake, and I-95/I-395 Hot Lanes in Northern Virginia. They would be candidates because of several factors:
o Toll revenues could repay loan
o Strong local support
o Right-size project
o Locality top priority
Facts about Direct GARVEE Bonds
A GARVEE bond is a debt financed instrument that allows investors to be repaid through the use of future federal highway funds.
The legislative proposal will also include a recommendation to modify Virginia Code to authorize Direct GARVEE bonds.
Direct GARVEE bonds are sold for specific construction projects and use federal revenues for debt service.
This would allow the Commonwealth to issue at least $1.1 billion in direct GARVEE bonds and utilize toll credits for state match, freeing up cash for statewide and regional projects.
Several projects that may immediately benefit from the combination of the Direct GARVEE bonds and toll credits include the Midtown Tunnel in Norfolk, the Broad Street Corridor in Richmond, 460 PPTA projects, I-95/I-395 Hot Lanes in Northern Virginia, and the Coalfields Expressway, as well as others.
Posted By Valerie Garner
Categories: Business, Politics, State Politics
Tags: budget, economy, governor, transportation