DALLAS — The Transportation Infrastructure Finance and Innovation Act program is likely here to stay, though it is unclear how much funding it will receive in the future, federal officials said here yesterday.
“We need [TIFIA] more than perhaps we have ever before,” Marshall Crawford, managing director of JPMorgan said at The Bond Buyer’s 10th Annual Transportation Finance and Public-Private Partnerships Conference.
Crawford warned that because the current surface transportation law has not been reauthorized and TIFIA’s future funding level is uncertain, transportation market participants should seek out other “market opportunities that you can avail yourself of if you need to.”
The TIFIA program provides low-interest loans and credit support for transportation projects, often with a user fee component. It was authorized by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users, or SAFETEA-LU, which expired Sept. 30 and has not been replaced.
TIFIA became popular during the credit crunch and was oversubscribed.
As a result, the program had to essentially borrow against its budget for next year and required some borrowers to pay a fee to offset some costs, said TIFIA acting director Duane Callender.
This year, TIFIA provided $1.8 billion of credit assistance, supporting a total investment of $6.5 billion, including about $2 billion in bonds, according to Victor Mendez, administrator of the Federal Highway Administration.
Mendez said there will be “some semblance” of TIFIA funding in the future, but added that the “methodology or technique” for implementing the program is still undefined.
“Things will get a little bit trickier as we try to advance new concepts,” Mendez said of overall programmatic changes in transportation financing.
He added that the outcome of health care reform legislation “will have some impact on transportation” by laying the groundwork for what the administration and both political parties can do in major pieces of legislation.
Speakers also highlighted the recent intersection of the American Recovery and Reinvestment Act — which provided a boost in funding to states for highway and other infrastructure repairs — and the delayed reauthorization of SAFETEA-LU.
Even while ARRA funding is supporting shovel-ready projects, there is uncertainty about when a new multi-year transportation law that provides a steady stream of funds to states, will be approved. SAFETEA-LU programs have been operating under stopgap measures since the law expired.
Because of the budget rules applied to those stopgap measures, and a rescission of more than $8 billion of federal highway aid to states, the FHWA has been able to apportion only about two-thirds of the funding that it usually provides to states, said Mortimer L. Downey, senior adviser for Parsons Brinckerhoff and former deputy transportation secretary.
The Federal Transit Administration has been able to apportion no money since Sept. 30, he added.
Meanwhile, Build America Bonds were lauded by issuer officials including those from the Texas Department of Transportation. TxDOT chief financial officer James M. Bass said the recent issuance of $1.2 billion of taxable BABs saved the department $275 million over what it would have paid on comparable issue of tax-exempt bonds.