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UMD to Help Guide Implementation of Infrastructure Law
A historic opportunity exists for states and the nation as a whole to make urgently needed improvements to transportation infrastructure, according to speakers and panelists at the Build Infrastructure Better Symposium, held at the University of Maryland (UMD) on Monday (April 11). The symposium, which featured two expert panel sessions, doubled as the official launch […]
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State and Local Legislation
In order to utilize certain types of transportation funding mechanisms or finance programs, state and local governments must first enact enabling legislation to create the tool or program and to govern the way it works. State legislation also governs the implementation of certain Federal programs. This section of the BATIC Institute website provides overviews of […]
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Federal Legislation
Overview The Federal transportation program is the accumulation of legislative actions focusing on Federal funding, regulation, and other aspects of the nation’s surface transportation systems and their administration. Legislation is updated on a periodic basis, with some updates focused on programmatic areas, some allocating funds, and others doing both. The program has evolved through successive […]
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Other Finance Mechanisms
Two mechanisms for a public agency to compensate a private entity for their project responsibilities (design, construction, finance, operations and/or maintenance) under a concession arrangement are availability payments and shadow tolls. Availability Payments Availability payments are made to a private concessionaire by a public project sponsor based on project milestones or facility performance standards in […]
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Mechanisms to Leverage Federal Aid
Federal-aid fund management tools are designed to provide states with greater flexibility in managing Federal-aid highway funds. Typically state and local governments must provide 20 percent of the funding for projects benefiting from Federal aid. The principal objective of the management techniques described here is to ease restrictions on the timing of obligations and reimbursements […]
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Bonding and Debt Instruments
One way to raise equity for a transportation project is to issue bonds. A bond is a written promise to repay borrowed money on a definite schedule, usually at a fixed rate over the life of the bond. Transportation bonds are traditionally municipal bonds, which are issued by state and local government entities to finance […]
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Federal Credit Assistance
The United States Department of Transportation has developed a number of financial tools to help project sponsors access credit to expedite the implementation of needed transportation improvement. Federal credit assistance can take one of two forms: loans, where project sponsors borrow Federal highway funds directly from a state DOT or the Federal government; and credit enhancements, where a state DOT or the Federal government makes Federal funds available on a contingent (or standby) basis. Credit enhancements help reduce risk to investors and thus allow project sponsors to borrow at lower interest rates. Loans can provide the capital necessary to proceed with a project, reduce the amount of capital borrowed from other sources and may also serve a credit enhancement function by reducing the risk borne by other investors.
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Proposed Funding Sources
A number of new transportation funding sources have been proposed to augment existing sources. AASHTO maintains a Matrix of Illustrative Surface Transportation Revenue Options itemizing new sources and their yield forecasts based on certain applied rates or percentages. The matrix also makes revenue estimates for illustrative increases in existing Federal Highway Trust Fund revenue mechanisms. […]
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Local Funding
Revenue from local government plays an important role in transportation finance. General fund appropriations represent the largest single source of local funding. The use of property taxes also distinguishes local transportation funding from that of the Federal and state governments. Other broadly collected taxes, such as hotel or rental car taxes may also be directed […]
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State Funding
States collect taxes and fees from motor vehicle users and use the revenues to support a variety of transportation (and non-transportation) expenditures. States generally have more flexibility in the varieties of taxes they collect, as well as in how they dispose of those taxes. Taxes imposed by states and localities are collected and administered by […]
