[IMAGE]Rails-1.jpg[/IMAGE]A delegation from Los Angeles has recently taken several trips to Washington, D.C., meeting with administration and congressional officials to float an idea they have to speed up projects that use local funds. If adopted, their proposal could have implications for all major transit infrastructure projects throughout the country.
Leveraging local tax dollars
Simply put, Mayor Antonio Villaraigosa wants the federal government to loan directly, or guarantee private sector loans, to the county's Metropolitan Transportation Authority to the tune of $8.8 billion. That amount represents the gap between completing the massive expansion plan passed by voters through Measure R in November 2008 in a decade rather than 30 years. That's why he and county officials call it the "30-10 plan." Measure R funds a 78-mile expansion of the county's rail and bus rapid transit network with a dedicated sales tax increase.
The proposal is not asking for a handout. Rather, it is asking for the full faith and credit of the federal government on loans that would be repaid with sales tax revenues that are already designated to the project.
Both chairs of the Transit and Highways subcommittee and full Transportation and Infrastructure Committee in the House as well as their counterparts in the Senate are investigating whether and how either the Build America Bonds program, the proposed National Infrastructure Bank or some other policy can accommodate this concept.
As are Seattle's officials, because the voters of their region have also enacted a local tax increase to support transit expansion. In fact, more than $70 billion in local, state and county taxes over the past decade have been approved for transit projects. More than 70 percent of all referenda for transit have been approved in local elections since 2000, according to the Center for Transportation Excellence in Washington, D.C., which tracks such initiatives throughout the country.
What's not to like?
Of course, not everyone is enamored by the idea. Some libertarian groups oppose virtually any federal funding of rail transit on ideological grounds, and other conservative groups are against any federal leveraging of infrastructure investment. Never mind that the federal government has never defaulted on such a loan and, in virtually all cases, receives a return on any investment, just as it has done in the Troubled Asset Relief Program. Furthermore, as mentioned earlier, this likely will be only a federal guarantee that doesn't even hit the Treasury's books.
Some more legitimate hurdles need to be overcome as well, such as the fact that there is nothing in current law enabling such an idea. However, at a time when both sides of the political spectrum are looking for ways to stimulate the economy, create construction and other jobs, and help state and regional economies in low-cost, low risk ways, this seems like a no-brainer.
Cliff Henke, a contributing editor to METRO, is senior analyst at PB. His views herein are solely his own.