National Infrastructure Bank
The Highway Trust Fund is an effective tool for providing states and cities with basic funding to repair and, to some extent, complete major road and transit projects. As Congress considers the reauthorization of SAFETEA-LU, it must find a way to significantly increase its investment level to better meet the roughly $200 billion in annual transportation needs necessary to keep our nation competitive and grow our economy. In addition, the American Society for Civil Engineers has identified over $2.2 trillion in outstanding infrastructure needs that must be completed in order to improve the state-of-repair of our transportation, water and wastewater systems, levees, dams, airports, and other sectors.
Beyond providing investment allocations for states and cities, transportation and infrastructure projects of regional and national significance should be undertaken within a new model that:
- Provides incentives to undertake multi-state efforts to address major transportation needs.
- Enables merit-based selection of projects so that the most critical and feasible projects proceed.
- Ensures federal assistance at a significant enough scale to make these major projects financially viable.
- Creates a method for private capital to be included in these projects so that federal/state/city dollars are maximized.
In large measure due to BAF’s efforts, the President proposed a National Infrastructure Bank to accomplish most, if not all, of these critical improvements. The Bank would have the authority to employ a range of finance and funding tools including: grants, credit assistance, low interest loans and tax incentives. In this way, the Bank would not just be another financing program, as project sponsors would be encouraged to identify new revenue streams to leverage costs, promote more efficient governance and spur further innovation.
Ideally a National Infrastructure Bank (NIB) would not be limited to transportation projects but would also include the authority to support ports, rail (freight and passenger), drinking and waste water needs, electrical grid, broadband and school construction.
The Bank could initially be funded through the General Fund of at least $25 billion with other potential sources of funding that could include:--All or some of the interest that has been collected from repayments of TARP funding.
- Reallocation of unused ARRA funding.
- A percentage of revenue collected from a carbon cap and trade program.
- A six-year, reformed transportation bill.
- Private investments through financing mechanisms.
BAF does not have an official position on individual funding sources.