Federal BRIDGE Act Could Help Fund Missouri Infrastructure Improvement
As we have written about many times before, Missouri continues to grapple with an impending funding shortfall for the Missouri Department of Transportation (MoDOT). At the same time, mirroring the failure of state policy makers, the federal government is facing a transportation funding crisis of its own. A new bi-partisan bill, the BRIDGE Act, may provide more federal support for Missouri infrastructure projects if the state can solve its own funding mess.
For some background, in recent years federal highway revenue has failed to keep pace with the federal government’s transportation spending. This has caused the federal highway trust fund, which takes in highway user fees and funds highway and transit projects across the country, to hemorrhage money. Only regular infusions of general revenue, to the tune of more than $55 billion in recent years, have kept the trust fund solvent. Missouri is heavily dependent on the highway trust fund to build highways and transit improvements, among other needs. Missouri has no backup plan if there are large federal funding cuts.
National leaders have suggested many ways of fixing the funding problem, including drastic spending cuts, raising the fuel tax, developing congestion taxes, introducing more tolling, cutting funding to transit, tapping repatriated tax dollars, and even eliminating the trust fund altogether. The BRIDGE Act side steps the ultimate fate of the highway trust fund, and instead will try to extend financing to important state projects outside the traditional funding system. The act proposes to set up an Infrastructure Financing Authority (IFA), which would finance up to 49% of large state and local infrastructure projects of “national importance.” The remaining 51% of project financing would need to come from local dedicated revenue streams. While the Authority would have $10 billion in seed money, the goal is self-sufficiency, with IFA charging state and local governments fees for loans.
While the BRIDGE Act is just the latest reform idea for federal infrastructure funding, it has significant bi-partisan support and does not entail increased taxes or spending cuts. If this proposal were to come into force, it could mean more financing for infrastructure projects across Missouri, but only if the state and local governments get their own funding sources in order. IFA would only loan money, which will have to be paid back, and local governments need to secure financing for the non-federal portion of the debt.
MoDOT could best use this act to alleviate its funding crisis by introducing tolling on major projects. That would create the revenue stream to apply for IFA support without raising taxes. Local governments could also fund necessary infrastructure projects, without raising taxes, by choosing projects where user fees could pay back IFA loans. And while the Bridge Act may or may not pass, getting transportation funding in Missouri on stable footing will pay dividends whatever happens at the federal level.
