Reston Spring

Reston Spring
Reston Spring

Wednesday, July 2, 2014

The Silver Line has a TIFIA funding commitment, but what if there isn't any?

OK, it's called the "Highway Trust Fund" and it's going belly up as early as August if Congress doesn't act to fund it.  And "TIFIA" funds, even those for mass transit projects, come from the Highway Trust Fund.  But there's more...

Here is how Kriston Capps at CityLab reports the situation:
 The Obama administration is outlining the steps it will take if the Highway Trust Fund runs out of funds, a doomsday scenario that looms just weeks away. 
Since April, the U.S. Department of Transportation has warned that the trust used to fund state transportation projects is running out of money. Unless Congress takes action to replenish the Highway Trust Fund, the administration expects that it will be exhausted by the end of August.
Today, according to the Huffington Post's Sam Stein, Department of Transportation Secretary Anthony Foxx outlined the drastic measures that the administration will be forced to take if Congress does nothing.
“This cliff is coming," Foxx said, according to the report. "I’ve been saying it for six months and I’m worried that we may find ourselves running over it."

 DOT authorities predict a shortfall for the Highway Trust Fund—which was established in 1956 to finance the U.S. Interstate Highway System—to manifest in the last days of August. Before that happens, DOT will implement a "cash management plan" to parcel out federal reimbursements for state outlays, starting Aug. 1.  . . .
The news is slightly less grim for the Mass Transit Account—or more ambiguous, anyway. DOT hasn't yet implemented a cash-management plan for mass-transit reimbursements. But Sec. Foxx's letter to the states on the Mass Transit Account notes that disaster on that front is merely delayed: This account is predicted to reach a crisis point in October.
Congress can take action at any time to avoid the transit cliff and keep payments to the states moving on time. In February, the Obama administration outlined a four-year, $302 billion transportation reauthorization proposal. In April, the administration sent the plan to Congress. But neither lawmakers nor administration officials have shown great enthusiasm for raising federal gas taxes—now, or at any point since 1993. . . . .
Click here for the rest of this article. 

As we understand it and have reported previously, DOT says the following: 
(TIFIA is) Funded by contract authority and reimbursed from the Highway Account of the Highway Trust Fund, to remain available until expended. Funds are subject to the overall Federal-aid obligation limitation.
If that's the case, then the US Congress has four weeks to find funds for the Highway Trust Fund or SOMETHING--and we don't know what--is likely to happen to DOT's commitment to provide two billion dollars in TIFIA financing for the Silver Line.  The longer Congress doesn't do anything, the more severe the consequences are likely to be.  In a worst case scenario, it could mean that MWAA has to issue all its $2 billion Phase 2 construction debt at market rates.  If that occurs, it could mean a roughly fifty percent increase in tolls above those expected using low-rate TIFIA financing for Dulles Toll Road users over the next four decades culminating in $18 tolls instead of $12 full one-way tolls at mid-century.

Even with a Congressional election coming up in November and virtually every Congressional district affected by a cut off of road and transit funds, Congress' pathetic impotence in passing legislation--certainly any requiring new revenues--over the last several years gives us little confidence that new funds will be forthcoming and Dulles Toll Road users will receive some financial relief.

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