Feds tout transport loans as highway bill deadline looms

The Department of Transportation said Monday that it is using loans to help fill gaps in federal infrastructure funding as Congress faces a May 31 deadline for extending the nation’s highway programs. 

The Transportation Department said $500 million worth of loans were issued in March through its Transportation Infrastructure Finance and Innovation Act (TIFIA) program.  

“As predicted the month of March came in like a lion. But for DOT’s TIFIA program, it did not go out like a lamb,” the agency wrote in a blog post on its website touting a $194 million loan that was awarded to a highway project in Orlando and a $209 million loan that was issued to a separate project in Ohio. 

{mosads}“DOT’s support for these two projects shows a program that stands ready to fill market gaps with supplemental credit so state and local governments, transit agencies, railroad companies, special authorities, special districts, and private entities can get back to the business of building America,” the blog post continued. 

The loan grants come as lawmakers are struggling with how to pay for an extension of the highway bill that is scheduled to expire on May 31, which typically includes funding for the TIFIA program. 

The traditional source of transportation funding has been the 18.4 cents per gallon federal gas tax that was established in the 1930s. The tax has not been increased since 1993, even as cars have become more fuel-efficient in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion.

Lawmakers have turned to other areas of the federal budget to close the $16 billion gap, and they are talking about passing another extension now to prevent a construction shutdown this summer. 

DOT officials said Monday that lawmakers should extend the highway measure that includes TIFIA loans because the low-interest financing awards are used by states to attract private investment in construction projects. 

“The Transportation Infrastructure Finance and Innovation Act (TIFIA) extends loans and credit that projects can then leverage to attract more financing,” the agency wrote. “It’s a multiplier so powerful that each dollar of federal funds can provide up to $10 in TIFIA credit assistance and support up to $30 in transportation infrastructure investment. And in a world of diminished transportation funding, the most recent projects in Orlando and Ohio show that TIFIA can help move projects forward.” 

The last multi-year transportation bill that was approved by lawmakers in 2012 included $1.7 billion for the TIFIA program over two years. The legislation also streamlined the application process for the loan program to make it easier for cities and states to apply for the funding.

The highway funding measure that is currently scheduled to expire in May is temporary extension of that 2012 legislation, which was known as the Moving Ahead for Progress in the 21st Century Act (MAP-21). 

Lawmakers in both parties have expressed a desire to pass a long-term transportation funding bill this year, but consensus on a way to pay for it has been elusive. 

Transportation advocates in Washington have pushed for a gas tax increase to solve the infrastructure funding problem, but lawmakers have been reluctant to ask drivers to pay more at the pump.

Other infrastructure supporters, including the Obama administration, have called for taxing corporations’ overseas profits through a process known as “repatriation” to pay for the highway funding extension. 

The Obama plan requires companies to bring earnings that are currently stored overseas to the United States and pay a 14 percent tax rate on them. Administration officials say the proposal could generate an estimated $238 billion that could be used to pay for infrastructure improvements.  

Republicans in Congress have said they are open to using tax revenue from overseas corporate profits to finance transportation projects, but they have expressed concerns about making the repatriation mandatory instead of voluntary.

GOP leaders have suggested it would be more effective to offer companies a one-time “tax holiday” to entice them to move money back to U.S. rather than forcing them to do it. 

Transportation Department officials said last week that the federal government’s transportation funding will run out in July if lawmakers do not reach an agreement on an extension.