TRANSPORTATION FINANCE AND DEBT

Transcription

1 N C S L S T A T E T R A N S P O R T A T I O N S U M M I T A T L A N T A, G A M O N D A Y 1 2 A U G U S T Leveraging the Money TRANSPORTATION FINANCE AND DEBT Joung H. Lee Associate Director for Finance and Business Development American Association of State Highway and Transportation Officials Deputy Director AASHTO Center for Excellence in Project Finance

2 FUNDING VERSUS FINANCING Funding: Revenue sources generated at the Federal, state and local levels used for transportation investment needs Examples: Taxes, fees, user charges, capturing enhanced property values Financing: Tools to leverage transportation funding and revenue sources Allows project sponsor to raise high up-front costs needed to build projects Expedites implementation of needed transportation improvements 2

3 LEVERAGING THE MONEY: TRANSPORTATION FINANCE AND DEBT Federal infrastructure policy tools Transportation financing options Review of public-private partnership (PPP or P3) activities in the US Transportation financing proposals and trends 3

4 FEDERAL INFRASTRUCTURE Funding (Grant) Programs Finance-Related Programs POLICY TOOLS Credit Assistance (TIFIA, RRIF) Tax Incentives o Tax-exempt Bonds (Governmental, PABs) o Tax-credit Bonds (BABs, QTCBs, TRIPs?) Regulatory Initiatives o Permitted uses of federal funds (GARVEEs, SIBs, Sec 129 Loans) o Tolling authority Institutional Arrangements / Program Delivery National Infrastructure Bank (NIB) Proposals 4

5 LEVERAGING THE MONEY: TRANSPORTATION FINANCE AND DEBT Federal infrastructure policy tools Transportation financing options Review of public-private partnership (PPP or P3) activities in the US Transportation financing proposals and trends 5

6 TRANSPORTATION FINANCING UTILIZATION BY STATES General obligation or revenue bonds (44 states + DC + PR) GARVEE bonds (33 states + DC + PR) Private Activity Bonds (PABs) (6 states) TIFIA federal credit assistance (12 states + PR) State infrastructure banks (SIBs) (34 states + PR) Design-build (authorized in 38 states + PR) Public-private partnerships (PPPs or P3s) (authorized in 33 states + PR) Source: National Conference of State Legislatures. 6

7 LEVERAGING THE MONEY: TRANSPORTATION FINANCE AND DEBT Federal infrastructure policy tools Transportation financing options Review of public-private partnership (PPP or P3) activities in the US Transportation financing proposals and trends 7

8 POTENTIAL OF THE PPP (P3) OPTION Can advance large complex transportation projects with revenue streams Can provide greater leveraging of revenue streams (access to private sources of investment capital) Can create cost savings and production / operating efficiencies Can transfer construction, financing and other risks from the public sector to private partner(s) BUT PPPs themselves do not create new money for state/local project sponsors. The private investment must be repaid with general revenue (taxes) or project-specific revenue (tolls). In other words, PPPs are project delivery and financing approaches, they are not funding sources. 8

9 STATES WITH PPP ENABLING LEGISLATION Source: National Conference of State Legislatures

10 PPPS (P3) IN PERSPECTIVE P3 market share of total U.S. capital investment in highways by all levels of government since 2008 is about 2 percent P3 market share of total annual spending on new highway capacity is about 11 percent P3 developers expect deal flow to be 2 to 4 projects a year Source: W W W ARTBA. T RReport A N Son P The O R TRole A Tof I Private O N. OInvestment R G in Meeting U.S. Transportation Infrastructure Needs, by William Reinhardt, publisher and editor of Public Works Financing, May

11 LEVERAGING THE MONEY: TRANSPORTATION FINANCE AND DEBT Federal infrastructure policy tools Transportation financing options Review of public-private partnership (PPP or P3) activities in the US Transportation financing proposals and trends 11

12 TRANSPORTATION FINANCING PROPOSALS AND TRENDS TIFIA administration and oversight Tax reform and potential impact on tax-exempt bonds Tax-credit bonds TRIP bonds: Sen. Wyden (D-OR) and Sen. Hoeven (R-ND) America Fast Forward bonds: Obama Admin., LA Metro National Infrastructure Bank Obama Administration Sen. Warner (D-VA) National Infrastructure Development Bank Act: Rep. DeLauro (D-CT) Repatriation/bond guarantee Partnership to Build America Act: Rep. Delaney (D-MD) 12

13 Thank You Joung H. Lee Associate Director for Finance and Business Development American Association of State Highway and Transportation Officials / jlee@aashto.org / 13