The powerful House Ways and Means Committee recently heard testimony from state and local officials on how to create and fund a new National Infrastructure Bank. Witnesses highlighted efforts around the country to find new ways to finance transportation projects, from the Measure R dedicated sales tax in Los Angeles to Kentucky’s new Green Bank (a revolving fund dedicated to promote energy efficiency, capitalized with ARRA funds).
Witnesses emphasized the need for new transportation funding, noting that the United States has fallen far behind certain competitors in our relative investments in infrastructure (China invests nine percent of GDP, while the U.S. invests less than two percent) but disagreed as to how a national infrastructure bank should be structured.
Governor Rendell noted that an infrastructure bank could help draw private funds into the mix of transportation funding options available by providing credit enhancement and loan guarantees – strategies that require minimal investment in terms of federal dollars. He asserted that the infrastructure bank could help finance critical investments in projects of national significance, as the TIGER grants have done with stimulus dollars.
It is noteworthy that the taxing committees have turned their focus to infrastructure finance. Several proposals pushed forward in this past year, including the Administration’s National Infrastructure Innovation Finance Fund, may demonstrate a political appetite for enacting new infrastructure financing programs in the near future. These efforts may provide a welcome boost in transportation investment. A new financing program could be structured to function with relatively low cost/capitalization when compared to multi-year grant programs like the transportation authorization bill, which has been repeatedly delayed due to funding concerns.
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