Hoeven: Bipartisan Coalition of Lawmakers Propose TRIP Bonds as Cost-Effective Way to Fund Transportation Infrastructure Projects
WASHINGTON – U.S. Senators John Hoeven (R-N.D.), Ron Wyden (D-Ore.) and Congressmen Leonard Boswell (D-Iowa) and Ed Whitfield (R-Ky.) have introduced legislation known as Transportation Regional Infrastructure Project (TRIP) bonds which would leverage public financing to fund transportation infrastructure projects in all 50 states. The plan, which is fully paid for within the Highway Funding bill, would provide each state with $1 billion to be used at local discretion for key infrastructure projects. States themselves would decide which projects would best serve their infrastructure needs.
TRIP bonds will provide private investors a federal tax credit in lieu of interest to incentivize an investment of $50 billion over six years. By leveraging readily available private capital, public transportation projects can go forward at a fraction of the cost to the federal government, the sponsors say.
At a press conference held today in Washington, D.C., the lawmakers were joined by current American Action Forum president and former- CBO director Douglas Holtz-Eakin and the Chief Operating Officer of the American Association of State Highway and Transportation Officials (AASHTO) Jack Basso, both of whom have endorsed tax credit bonding for transportation infrastructure projects.
“TRIP Bonds are an efficient way to leverage private-sector dollars to build the infrastructure we need to grow America’s economy and create sustainable jobs,” Hoeven said. “At a time when North Dakota is creating jobs, growing its economy and attracting new residents, TRIP bonds can be particularly helpful in building needed infrastructure for our state. We have bipartisan support for this effort and seek to do it in a way that incentivizes private investment, and pays for it within the federal DOT budget so that it doesn’t increase the deficit.”
“In a political climate where budgets are being decreased, it is becoming harder and harder to find the funding needed to repair our crumbling infrastructure,” Wyden said. “However, private capital is often sitting on the sidelines just waiting to be invested. TRIP bonds leverages that money, injecting the economy with billions in new investment dollars to build infrastructure that will indirectly improve the economy even more.”
“Tax credit bonds, like the TRIPs proposal, provide a fiscally conservative way to fund our nation’s infrastructure,” said current American Action Forum president and former CBO director Douglas Holtz-Eakin. “This is an innovative way to provide $50 billion in new infrastructure projects at the lowest cost to the taxpayer. It’s a bipartisan idea that can help create and sustain jobs by jumpstarting American infrastructure projects that will allow our nation to compete on a global scale.”
“Major national commissions and organizations like AASHTO and the American Society of Civil Engineers have documented the need to substantially increase our nation’s infrastructure investment,” said AASHTO Chief Operating Officer Jack Basso. “AASHTO supports TRIP bonds as an innovative way to bring additional funding to start to reverse the massive infrastructure funding deficit.”
TRIP Bonds are tax credit bonds designed specifically to fund transportation infrastructure projects in all 50 states. The legislation allows state-based funding entities to sell these bonds to investors – offering them a tax credit instead of interest on the bond. This opens up the market for infrastructure bonds dominated by tax-exempt bonds to organizations and investment funds that are already tax-exempt like university endowments and will be an additional means of financing these projects that is popular on both sides of the aisle.
TRIP bonds have been endorsed by a wide range of state and local officials as well as business and labor leaders including: American Association of Road and Transportation Builders, American Association of State Highway and Transportation Officials, American Highway Users Alliance, Associated General Contractors of America, International Union of Operating Engineers, Laborers’ International Union of North America, National Association of Manufacturers and U.S. Chamber of Commerce.
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