As New Hampshire prepares for the nation's first presidential primary Tuesday, Gov. Maggie Hassan is pitching a 10-year $3.7 billion transportation plan that thanks to federal assistance allows the state to tackle more infrastructure needs.
The decade-long initiative that Hassan announced last month utilizes savings from the Transportation Infrastructure Finance and Innovation Act to resurface an additional 200 miles of roads a year while also replacing or rehabbing 23 "red-listed" bridges. Among the Democratic governor's transportation goals for 2017 through 2026 are an expansion of Interstate 93 and the first phase of a widening of Route 106 in front of the New Hampshire Motor Speedway in 2018. The plan also calls for a full replacement of the Hampton River Bridge, which dates back to 1949, and assessment work for a planned Capital Corridor Project that would add rail service from Nashua to Boston.
"With our economy continuing to strengthen, Governor Hassan put forward a plan that advances many critical transportation goals while maintaining fiscal responsibility and living within our projected revenues," Gov. Hassan's spokesman, William Hinkle, said in a statement. "Governor Hassan's proposal advances critical transportation goals – including fixing and preserving roads and bridges, completing the expansion of Interstate 93, and moving forward with commuter rail from Boston to Nashua and Manchester – while maintaining fiscal responsibility living within our projected revenues."
New Hampshire Treasurer Bill Dwyer said the TIFIA program is playing a critical role in allowing the state to pursue crucial transportation projects. The program, which was founded in 1998, provides Federal loan assistance to finance surface transportation projects considered of "national and regional significance." TIFIA credit assistance also provides improved access to capital markets.
"The TIFIA program enables the state to keep interest rates at a minimum," said Dwyer. "It allows the state's Department of Transportation to address critical roads in the state."
The five-year, $305 billion federal highway bill signed by President Obama in December provides for $1.43 billion in TIFIA funding. This marks a reduction to around $287 million a year from $1 billion a year in 2014 and 2015.
TIFIA financing for I-93 expansion efforts represents 4.6% of Hassan's 10-year plan at $173.3 million. An additional $181.43 million is dedicated to TIFIA-pledged paving and bridges comprising 6.8% of total costs.
"It's a borrowing vehicle, but the borrower still needs to come up with the refunding source," Moody's analyst Tim Blake said of the TIFIA program. "It provides a low cost layer to financing, but you have to demonstrate that you have a source of repayment."
Dwyer said New Hampshire's TIFIA financing is supported by general obligation and revenue pledges. He said the incremental road toll revenue created by a 2014 gas tax increase will provide the dedicated revenue source to pay debt service. The TIFIA closing is expected in May with final maturity slated for June 2034.
"Leveraging the TIFIA program provides the ability to complete $200 million of work to complete I-93, pave 1160 miles of poor and very poor roads, and rehabilitate or reconstruct 23 red-list bridges, which are critical transportation priorities that will help support long-term economic growth," Hinkle said.
The TIFIA program was a key catalyst in getting a replacement of the Tappan Zee Bridge connecting New York's Westchester and Rockland counties, Blake said. The estimated $5 billion project from the New York Thruway Authority was keyed in large part by a $1.6 billion TIFIA loan.
The Federal Highway Administration encompasses nearly half (49.2%) of funding for the long-range plan at $1.84 billion. Funds from a proposed Turnpike Capital program that would be used under current toll structure rates makes up $350.35 million (9.4%) of program dollars. An additional $350.35 million (9.4%) is derived of anticipated revenue from New Hampshire Senate Bill 367, which Hassan signed into law in May 2014 and raised the state's gas tax by 4.2 cents-per-gallon.
Hassan said the plan, which was submitted to the state legislature on Jan. 14, is based on recommendations from the Governor's Advisory Commission on Intermodal Transportation following 16 hearings. The commission included New Hampshire Department of Transportation Commissioner Victoria Sheehan.
"This is a financially constrained plan in which needs outweigh available resources, with a focus on preservation, maintenance and safety of the existing pavement and bridge infrastructure throughout the state," said NHDOT spokesman Bill Boynton. "As a result of anticipated TIFIA funding and the [Fixing America's Surface Transportation Act], the draft 10-year plan has more robust paving and bridge programs, as well as is fully financially constrained in the first five years with additional capacity in the later five years. This is very good news as it sets expectations that are financially achievable and deliverable."
Bridge projects comprise the largest portion of the proposed transportation funding at $820.38 million or 22% of total costs in the 10-year program followed by pavement improvements with $750.09 million (20%). Expansion efforts for I-93 would receive $244.45 million or 6.5% of the $3.7 billion total. The proposal also increases debt service payments annually starting at $19.61 million in 2017 up to $31.54 million in 2026.
Moody's Investors Service lead New Hampshire analyst John Lombardi said the state's strong rebound from the 2008 economic downturn has positioned it well for a long-range transportation plan. Moody's rated New Hampshire Aa1 with a stable outlook in November 2014 citing "manageable debt levels" and a strong economy that outperformed the nation during the aftermath of the 2008 economic downturn. The state adopted an $11.3 billion two-year budget for 2016 and 2017.
"The economy is pretty solid there," said Lombardi. "That will help their rainy day reserves that we're depleted during the recession."
Standard & Poor's affirmed its double-A New Hampshire long-term credit rating last October and assigned a stable outlook. S&P also credited the Granite State with having strong growth prospects, but cautioned that its low pension funding level of 60.7% could result in additional budget pressures.
New Hampshire achieved a $62 million surplus for the 2015 fiscal year, which according to Gov. Hassan will allow the state to double its Rainy Day Fund to $22.3 million. State revenues are also more than $40 million above projections for 2016, according to the governor's office.