ATLANTA - Georgia Gov. Sonny Perdue on Wednesday signed into law legislation that will create the state's first Transportation Infrastructure Bank.
With the power to utilize bonds, the bank is intended to provide small loans to cities, counties, transit operators, and community improvement districts. The program comes as the state struggles to keep up with transportation needs and recently found overspending had led to $1 billion of projects that lack funding.
The bank's initial capitalization will be $50 million, which will come mainly from motor fuel funds and state general funds.
The bank will fall under the control of the State Road and Tollway Authority, which will be able to issue bonds for the bank to use to help make the loans.
The bank can also be capitalized with appropriations from the General Assembly and federal funds available to the state. Contributions, donations, and deposits from government units and private entities can also be used for capitalization purposes.
Perdue has touted the benefits of the program as a way to provide low interest rate loans and flexible repayment terms that are not currently available for much-needed transportation projects. Furthermore, he says that as a revolving loan fund, dollars that are paid back will continually be made available for new transportation projects.
Projects will be selected for funding through the bank based on criteria that promote economic development and those that need "gap financing" to finish needed projects. Eligible projects will include roads, bridges, transit vehicles and facilities, bicycle and pedestrian facilities, rail, and airports. A task force of state and local agencies and the tollway authority will draft the selection criteria.
Georgia joins 32 other states that have transportation infrastructure banks, which have disbursed a total of $3.7 billion to more than 450 projects, according to the governor's office.
In addition to signing the bill on Wednesday, Perdue also spoke out about financial issues plaguing the Georgia Department of Transportation.
Gena Abraham, the commissioner of GDOT, said that a recent audit of the department authorized by Perdue found a $1 billion shortfall. Abraham inherited the financial problems. She only came into office in December.
"I was, you know, pretty upset when I found out where we are," Abraham said. "This is my first year as commissioner and our program is going to be significantly reduced. We've over-promised and under-delivered."
Perdue said he was equally concerned.
"I'm not sure whether we're at the bottom of the barrel or not, but every time she comes over, there's a smell that's not very pleasant about what's happening and what's being found there."
Abraham's plan of action to get spending under control includes prioritizing about 9,000 projects and putting a debt management program in place. Details on the debt program are expected to be released next week.