U.S. Reps. Ed Whitfield (R – KY) and Allyson Y. Schwartz (D-PA) have joined U.S. Sens. Ron Wyden (D-OR) and John Hoeven (R-ND) to introduce bipartisan legislation to make $50 billion available for projects to revitalize the nation’s transportation infrastructure by leveraging private investment.
The bipartisan, bicameral Transportation and Regional Infrastructure Project (TRIP) bonds legislation would allow states to issue up to a total of $50 billion – $1 billion per state – in bonds for transportation infrastructure projects over a six year period. The principal cost of the bonds would be covered by a trust fund composed of Customs User Fees. In lieu of interest, the bondholders would receive federal tax credits that could be applied against federal income tax liabilities.
Based on U.S. Department of Transportation's estimate of 30,000 jobs per $1 billion of transportation funding, TRIP bonds should yield approximately 1.5 million jobs.
The privately-leveraged, 30-year bonds could be used to fund a wide range of transportation and infrastructure projects including roads, bridges, transit, rail, and waterways. States would also be able to pool their funds for larger or multi-state projects.
“With millions of Americans still out of work and our infrastructure crumbling, TRIP bonds represent an opportunity to tackle both of these problems head-on, in a fiscally responsible manner,” stated Whitfield. “By leveraging private sector dollars, we can create jobs and make the infrastructure investments needed to stay economically competitive now and in the future. I look forward to working with my colleagues in a bipartisan, bicameral fashion to advance this legislation as part of a long-term surface transportation reauthorization.”
“America’s economic strength depends on the health of our infrastructure system. If we expect to sustain our leadership in an increasingly-competitive global economy, we cannot afford to ignore the structural deficiencies of our roads, bridges, airports and railways," said Schwartz. "This bipartisan legislation provides an efficient way to finance much-needed infrastructure investments that will sustain millions of jobs and maintain our nation's strength in the global marketplace."
“America’s economic future depends on expanding, maintaining and repairing its infrastructure,” Wyden said. “TRIP bonds provide an innovative, effective and low-cost way to create jobs and help strengthen our infrastructure by leveraging private funding.”
“TRIP bonds are an effective way to attract and leverage private sector investments to build and repair roads, bridges and other much-needed infrastructure in this country,” said Hoeven. “We’re working in a bipartisan and bicameral way to pass this legislation because TRIP bonds are about making our nation economically stronger and more dynamic in a highly competitive world market.”
According to a report by the American Society of Engineers, without the necessary investment in the nation’s infrastructure the economy will lose more than 3.5 million jobs and the GDP would be suppressed by $3.1 trillion by 2020.
TRIP bonds would originate with each individual state’s infrastructure bank. Each state infrastructure bank will be allocated two percent of the total amount of bonds to issue to projects of their discretion – a total of $1 billion per state. Most states have already created infrastructure banks, but those who have not can do so at any time to receive its portion of the TRIP bond funding.
TRIP bonds have been endorsed by a wide range of state and local officials as well as business and labor leaders including. Below are comments from some of those groups and people:
David Seltzer, principal at Mercator Advisors: “The proposal demonstrates that a tax incentive to attract investment into transportation infrastructure can receive bipartisan support. This bill could serve as the basis for a major federal commitment to transportation projects without putting greater pressure on the discretionary budget.”
Bud Wright, American Association of State Highway and Transportation Officials (AASHTO) executive director: “Given the tremendous transportation investment needs facing our country, TRIP bonds provide supplemental project financing capacity directly to those who construct and manage transportation facilities—the states and their transportation agencies. We applaud Sen. Wyden, Sen. Hoeven, Rep. Whitfield, and Rep. Schwartz for their bipartisan, bicameral support for transportation infrastructure improvements that underpin economic growth and quality of life for all Americans.”
Robyn Boerstling, director, Transportation and Infrastructure, National Association of Manufacturers: “While other nations are building and modernizing roads, bridges, transit systems, airports and ports at a rapid clip to serve manufacturing economies in Asia, South America and Europe, manufacturers in the United States need all the practical solutions we can find to invest in infrastructure. TRIP bonds will bring needed improvements to our transportation infrastructure that will strengthen our competitiveness and increase our export potential.”
Building America’s Future co-chair and former Pennsylvania Governor Ed Rendell:“As America’s infrastructure continues to crumble and our nation slips further behind as a global economic leader, it is critical that we find smart, creative ways to fund transportation projects. With the introduction of the TRIPs Bond Program, Representatives Schwartz and Whitfield and Senators Wyden and Hoeven are answering the nation’s call to action, providing $50 billion in new transportation infrastructure financing. I applaud these Congressional Members for working together to create a strong, bipartisan support for investing in our nation’s transportation systems. This innovative financing tool will help rebuild America’s transportation infrastructure and help put our nation back on the road to economic recovery.”