CHICAGO–(ENEWSPF)–June 20, 2011. With the nation facing a critical shortfall in infrastructure funding, Senator Mark Kirk (R-Ill.) today announced legislation to mobilize $100 billion in private investment to build new roads, airports, and railroads. During a bipartisan transportation summit at Union League Club that included a message from Mayor Daley, civic leaders and transportation experts, Kirk presented the draft Lincoln Legacy Infrastructure Development Act to give new life to President Abraham Lincoln’s economic legacy by building new roads, airports, and railroads using public-private partnerships without new federal borrowing.
“Our roads, rail, transit and airports are facing unprecedented funding shortfalls,” Senator Kirk said. “We should not further burden working families with higher gas taxes. Instead, we should look to our own economic history to find a solution.”
He continued, “One of President Lincoln’s greatest legacies was the Transcontinental Railway Act which led to the completion of the largest infrastructure project in American history without a dime from Congress. Approximately 2,000 miles of track were built in only six years, creating more than 7,000 cities and towns west of the Mississippi. The Lincoln Legacy Infrastructure Development Act embraces the Lincoln Administration’s public-private partnership success by lifting federal restrictions, which could mobilize $100 billion for new roads, airports and railroads.”
According to the National Surface Transportation Policy and Revenue Study commission, current highway, bridge, public transit, freight and passenger rail funding needs are approximately $225 billion per year through 2055, while current spending is less than $90 billion per year.
The Lincoln Legacy Development Act:
1) Removes federal restrictions on private-public partnerships;
2) Provides states greater flexibility to generate transportation revenues; and
3) Enhances access to private capital investment in our road, rail, aviation, highway and port infrastructure.
In addition, the bill lays out a clear plan for all major aspects of transportation development.
Provides Additional Resources for Project Financing ($42 Billion)
- Increases annual funding from $122 million to $750 million for the Transportation Infrastructure Finance and Innovation Act (TIFIA), a key loan program that helps finance major transportation projects, including those with private-public partnerships.
- Enables over $7 billion in loans for projects totaling more than $21 billion/yearly.
- Creates a Private-Public Partnership Challenge Grant Program to encourage States to pass legislation enabling private-public partnerships.
- Additional resources are deposited into the Highway Trust Fund to pay for the expansion via a half-percentage point decrease in federal civilian pay growth and a surcharge on safety rest area development.
Lifts Restrictions on Private-Public Partnerships for Highways ($42 Billion)
- Removes caps on Interstate tolling pilot programs, encouraging greater local control of highway financing.
- Allows commercialization of safety rest areas, providing additional resources to states with budget shortfalls.
- Ensures taxpayer accountability by requiring proceeds of leases, concessions or sales of highways to be reinvested in infrastructure.
- Lifts caps on highway private activity bonds to provide additional financing options for projects.
Incentivizes Private-Public Partnerships in Transit
- Creates a Private-Public Experimental Program to identify barriers to private investment, authorizing the Federal Transit Administration to find creative solutions.
- Requires States to increase High Occupancy Vehicle lane requirements to ensure potential Bus Rapid Transit corridors do not degrade.
- Corrects a FTA decision that prohibits formula funds for bus service on High Occupancy Toll lanes, encouraging new Bus Rapid Transit routes.
Reforms Private Rail Financing Efforts? ($35 Billion)
- Adds eligibility to high-speed rail projects and development costs under the Railroad Rehabilitation and Improvement Financing Program, an under-utilized loan program operated by the Federal Railroad Administration.??
- Allows projects like high-speed rail to use future dedicated revenues or user fees in place of collateral to lower credit risk premiums.
Encourages Airport Private-Public Partnerships
- Removes caps on the Airport Privatization Pilot Program and lifts barriers to private investment in airports.
The Lincoln Legacy Infrastructure Development Act could potentially unlock more than $100 billion in new transportation investment. Many other nations already have embraced partnerships to help finance their infrastructure needs. In British Columbia, Canada, 20 percent of all new infrastructure is designed, built and operated by the private sector. In Australia, partnerships account for 10-15 percent of all infrastructure procurement, or about $38 billion in 2008 alone.
According to the National Conference on State Legislatures, 29 states and Puerto Rico have passed legislation allowing some sort of partnerships. States such as Indiana have transformed their economies and fostered economic growth by encouraging public-private partnerships to finance infrastructure projects that create jobs without needing to borrow. Such projects have allowed Indiana’s economy to grow at twice the rate of Illinois’ over the past year.
The Illinois General Assembly has passed legislation that would allow the legislature to consider such partnerships. The legislation is awaiting Gov. Quinn’s signature.