Federal infrastructure bank not likely to help Texas roads

The Dodd-Hagel National Infrastructure Bank Act of 2007 was a bipartisan effort to address the nation’s major infrastructure woes. The intention was to establish a new method by which the federal government could leverage funding on significant infrastructure projects across a broad spectrum. House Speaker Nancy Pelosi finally expressed her support for the proposal last week in New York City.

“Rebuilding America is a national security issue,” Pelosi was quoted as saying in a transportation trade journal. “Ninety percent of our oil imports are used for transportation. With investments in public transportation, more efficient roadways, and a broadband backbone that removes commuters from roads, we can reduce our dependence on foreign oil and reduce its implications on our foreign policy.”

The bill was filed last year but only recently endorsed by both Democratic presidential candidate contenders Barack Obama and Hillary Clinton. When it was filed, the Minneapolis bridge collapse last August, which killed 13, had been at the top of the minds of many federal lawmakers. However, this infrastructure bank is intended to address infrastructure broader than bridges: significant highways; publicly owned mass transit; water and wastewater plants; and public housing units.

The need is huge. According to the Federal Highway Administration, $131.7 billion would be needed every year for the next 20 years to repair the nation’s deficient roads and $9.4 billion for its bridges. The average bridge is 40 years old.

That’s why Coby Chase, director of TxDOT’s Government and Public Affairs Division, was not holding out a great deal of hope that Texas would benefit from the proposed national infrastructure bank that would be modeled on the Federal Deposit Insurance Corp. and aimed at capacity-building infrastructure.

“In our community, the National Infrastructure Bank has left people with the impression that this is only for transportation infrastructure,” Chase told the Texas Transportation Commission during a legislative update. “But it really is only one of many things eligible for funding, including sewage and water treatment and low-income housing.”

When that’s taken into consideration – as well as the thought the fund could be drawn down by any of the 50 states – it’s difficult to imagine the Texas portion would be large, Chase said. If the $60 billion were divided evenly – instead of aimed at significant infrastructure projects, as planned – it would still be only $1.2 billion.

That’s about the cost of the new State Highway 161 exchange in Dallas-Fort Worth, one of dozens of projects on the table for funding in Texas.

“That’s not a lot of road infrastructure, or transit infrastructure,” Chase said. “From what I understand – and my understanding is limited – there are definitely some leverage opportunities and new money, but we need to step back and understand this is aimed at something much broader than roads. Let’s not build this up as something that is going to solve all our problems.”

In fact, funding levels in the Urban Transportation Plan approved by the Texas Transportation Commission yesterday set the amount available for new construction at somewhere around $28.2 billion.

According to the initial information released on the Dodd-Hagel bill, the process for picking the projects would belong to a board of directors. A project sponsor would bring the project to the board for consideration. It must be worth at least $75 million. The bank’s share would be based on a sliding scale that would weigh factors such as community benefit, national significance and associated economic growth.

Under such terms, either the Central Texas Regional Mobility Authority or the Capital Area Metropolitan Planning Organization could go directly to the bank to pursue funding – and especially gap funding – for significant infrastructure projects.

If local entities were able to secure a commitment to funding, the bank would develop a financing package with the government’s full faith and credit. The package could include a variety of tools: direct subsidies; direct loan guarantees; long-term tax-credit general-purpose bonds; and long-term tax-credit infrastructure project specific bonds. The initial ceiling to issue bonds would be $60 billion.