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Thursday, January 19, 2012

GARVEE Funds PASS or FAIL? Here is an Interesting Article from Idaho


While the Idaho speaker of the House, Rep. Lawerence Denney, R-Midvale, believes the remaining funds available for the road and bridge work financed in part by GARVEE Bonds could pass this session of the Legislature (after not making it through the 2011 Legislature), Senator Jim Hammond, R-Coeur d'Alene, chairman of the Senate Transportation Committee, disagrees, seeing it as an uphill fight, likely to fail.

GARVEE (grant anticipation revenue vehicles or a GARVEE) are tax-exempt bonds to finance road improvements throughout Idaho. These road improvements, undertaken by the Idaho Transportation Department (ITD), are to be repaid from federal highway funds received over a 20-year period from the Federal Highway Administration and certain state matching funds. Of the initial $998 million in GARVEE bonds authorized, there is $143 million available to the state.

Senator Jim Hammond feels GARVEE will be a tough sell because of legislative reluctance to take on another program and because the funds are available due to borrowing from the federal government and he sees little support, including himself, for relying on the feds for the money.

Senator Hammond also worries if the federal funding level Idaho is receiving continues to decrease, then the state must take more money from operating costs to pay for those bonds, which, in turn, makes it tougher for the state to maintain what it currently has.
In addition, Hammond says there is sentiment among some in the Legislature who consider GARVEE bonding as an indebtedness to its citizens, putting them on the hook for monetary obligations years down the road.
If the Legislature does not approve additional GARVEE funds, how does the state deal with the need for not only road and bridge repairs, but also expansion and replacement?
Hammond said ITD has an annual budget amount and plans for maintenance of the most pressing problems with no funds given to an expansion of existing infrastructure. According to Hammond, projects will be looked at only in terms of maintenance. Expansion and creation will not be a priority. Infrastructure that is degrading and needs the most urgent care will be the projects the state plan focuses on using whatever funds are available.
“That plan,” said Hammond, “isn’t put together with any thought about GARVEE. That plan is put together just based upon priorities of maintaining our current infrastructure. It used to be that part of that of that plan would have been expansion—additional lanes, new bridges, etc. Now because of the diminished level of funding the total amount of revenue available is just intended to be for maintenance and upkeep of our current infrastructure.”

Here is the link to the original article by MitchCoffman with Idaho

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