Tuesday, April 28, 2009

"No significant fiscal implication to the State is anticipated."

Transportation revolving fund approved

innovative financing


By Mike Ward
Austin American Statesman
Copyright 2009

The Texas Senate today approved the creation of a new Texas Transportation Revolving Fund to help expedite funding for much-needed highway projects across a state that is strapped for cash for such projects.

“Additional road-building capacity, upwards of $20 billion. That’s what this means,” said Senate Transportation and Homeland Security Committee Chairman John Carona, R-Dallas, the author of Senate Bill 1350.

Senate budget-writers have included $1 billion in funding of the new fund.

“This is a big deal,” said Senate Finance Committee Chairman Steve Ogden, R-Bryan. “This is one of the most creative bills to come of the Finance Committee.”

Corona said that for every dollar that is put into the new fund, “it will increase by a factor of three or four. Fifteen to twenty billion (dollars) will be the total impact.”

Under the legislation, the fund allows transportation funding to be “continually recycled by using repayments of financial assistance to provide assistance for other projects,” according to a bill analysis compiled by the Senate Research Center.

“On projects that are difficult to finance, we can use this fund as a temporary guarantor fund,” Corona said. “This will be one tool of many that we can use.”

After other senators applauded the measure, it was approved unanimously.

It now goes to the House for consideration.

© 2009 Austin American-Statesman: www.statesman.com

Transportation “bank” gets Senate approval

Patricia Kilday Hart
Texas Monthly
Copyright 2009

The Texas Senate just gave unanimous approval to Sen. John Carona’s SB 1350, which sets up the Texas Transportation Revolving Fund — a transportation “bank,” really — that will leverage $1 billion in transportation bonds authorized by Prop 12.

According to the bill’s analysis, the revolving fund will allow funds to be continuously recycle: the sale of loans will provide additional capital to the fund.

Carona was held up in passage only by a string of laudatory speeches, started by Finance chair Steve Ogden who complimented Carona’s “creativity” in setting up the fund, which could provide up to $20 billion in financing. The revolving fund could provide a vehicle for the Texas Retirement System and Employee Retirement System to invest in state infrastructure, a policy Ogden supports.

However, Ogden noted after passage of the bill that the Senate budget bill provides for debt service to fund the Prop. 12 transportation bonds, while the House’s budget bill does not. He hopes to persuade the House conferees to support the concept — which allows the state to use sales tax revenue, and not just the gas tax, to build highways.

Carona’s bill was headed to speedy passage with no comment when Ogden remarked on the lack of fanfare for such an important measure. “It’s all part of my humble nature,” Carona replied.

© 2009 Texas Monthly: www.texasmonthly.com

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