The Virginia General Assembly on Feb. 27 passed the bulk of Gov. Bob McDonnell’s transportation plan, which relies on borrowing money and speeding up bond sales to raise $3 billion over three years to pay for 900 transportation projects, according to Stateline.org.
The Assembly significantly cut funding from McDonnell’s plan for a state infrastructure bank but approved the governor’s plan to aggressively borrow money in the next three years, while interest rates are low, before he is term-limited out of office.
The state is currently behind in selling $1.8 billion in bonds approved in 2007 for a 10-year construction plan. McDonnell would speed up bond sales to get projects off and running in the next three years.
McDonnell’s plan also would raise $1.2 billion by borrowing against money the state expects to receive in future federal funding.
Virginia's economy would expand by $13.1 billion and support 105,642 additional jobs over six years if McDonnell's transportation plan is fully implemented, according to a statement from the governor’s office.
Of the $13.1 billion in total impact from 900 projects, $7.2 billion is direct construction spending while $5.9 billion represents the ripple effects. Benefits generated by the projects would exceed costs and would have an average economic impact of $2.2 billion and support 17,607 jobs annually through 2017.
Additionally, the result of the transportation investment would generate $119.8 million in tax revenue for the state and $10.4 million of benefits for local governments over the same period.
"Our transportation plan is aimed at putting Virginians back to work improving our transportation network," said McDonnell. "This analysis by a nationally recognized economic firm reinforces that our program—the largest influx of transportation funding in a generation—will not only address the needs of the aging highway system upon which we all depend, but it will also provide a needed injection of funding into our economy to spur recovery from the difficult recession of the past several years."
"The time is now for these transportation investments," said Sean T. Connaughton, secretary of transportation. "Construction bids are coming in well below estimates, and interest rates are very low. Responsibly advancing bond sales and accelerating projects can bring tomorrow's transportation improvements to citizens today."
The 900 projects would be funded under the multi-faceted approach that creates a Virginia Transportation Infrastructure Bank, accelerates the sale of $3 billion in pre-approved state bonds, and issues $1 billion in federal Grant Anticipation Revenue Vehicles (GARVEE) Bonds to finance federal projects. The program also encourages private entities to enter into agreements to construct, improve, maintain and operate transportation facilities.