HARRISBURG PA – Although it desperately needs money to upgrade roads, bridges and other transportation systems, Pennsylvania has little interest in obtaining loans today that bet on the uncertain prospect of receiving federal funds for the work sometime in the future, a state Department of Transportation representative told The Pennsylvania Independent online news service Monday (July 23, 2012).
More than 30 states nationwide have so far taken advantage of what are called “GARVEEs,” an acronym for grant anticipation revenue vehicles. They are a form of borrowing, according to The Independent, in which a lender offers up-front financing for construction projects with the promise it will be re-paid by grants or other money provided later by federal sources.
GARVEEs might be seen as one way to pay for reconstruction or expansion of U.S. Route 422 or Route 100, both of which serve the TriCounty (western Montgomery, Eastern Berks and northern Chester counties PA) area. However, PennDOT Press Secretary Dennis Buterbaugh said the Corbett Administration isn’t interested.
“Because of the debt load that would be incurred by the state using such financing for transportation projects, we feel it is not a prudent option,” Buterbaugh told The Independent in an e-mail. “Bonding is borrowing and we have to live within our means.”
Pennsylvania’s transportation infrastructure needs are pressing, with about $3.2 billion in immediate needs to be addressed, according to a report last summer from the state’s Transportation Funding Advisory Commission. How they will be met is still open-ended, but state debt does have its consequences. Ratings agency Moody’s last week downgraded the state debt rating in connection with unfunded pension liabilities.
- Read a story by reporter Melissa Daniels, titled “State won’t jump on the GARVEE train, officials say” and published Monday by The Independent, here.