In his US Department of Transportation (DOT) budget for fiscal year 2016, Secretary Anthony Foxx announced a $6 billion expansion to the Transportation Infrastructure Finance and Innovation Act (TIFIA) to encourage investment in infrastructure projects by state and local partners.
The announcement comes on the heels of President Barack Obama's proposal to provide the department with $94.7 billion in discretionary and mandatory funding in his own FY 2016 budget plan as an investment in America's infrastructure future.
Through the Grow America Act, a four-year, $302 billion transportation bill introduced last year, the DOT plans to expand financing options under TIFIA, evenly doling out the proposed $6 billion boost over the next six years in the hope of encouraging private sector investment in critical infrastructure projects.
The DOT estimates that this infusion will result in issuance of up to $60 billion in direct loans.
“Our budget proposal lays the foundation for a future where our transportation infrastructure meets the demands of a growing population and an economy that depends on the free flow of freight,” Foxx said. “This Administration is looking towards the horizon – the future – but to do this we need Congress' partnership to pass a long-term reauthorization to put Americans to work rebuilding America.”
According to a DOT release related to the budget announcement, in order to keep America's roads and bridges in good condition, federal, state and local governments will need to spend a combined total of $124 billion annually as a minimum, as compared with the current combined commitment of $100 billion.
The DOT estimates that there is an $86 billion backlog in transportation system maintenance needs around the US today.
In a conversation with Google's executive chairman Eric Schmidt on Monday in Mountain View, California, Foxx was critical of Congress' current patchwork approach to providing funding to transportation infrastructure maintenance projects, noting that Congress has passed 32 short-term funding measures in the last six years alone.
“The problem we have is that the country has really slowed down its planning process which is slowing down the ability to get these projects done, which is affecting jobs, travel times, and everything else,” said Foxx.
Among the priorities Foxx listed in his proposed FY 2016 DOT budget, he included the need to foster public-private partnerships (PPP; P3) through the DOT's Build America Transportation Investment Center.
To encourage such partnerships, the FY 2016 budget proposes creation a new Office of the Assistant Secretary for Innovative Finance to manage credit programmes and encourage development of plans that utilise innovative financing options.