Approved by the Transportation Policy Committee on February 24, 2022
Approved by the Public Policy and Practice Committee on March 4, 2022
Adopted by the Board of Direction on July 22, 2022
The American Society of Civil Engineers (ASCE) supports innovative financing programs for transportation projects and advocates making programs available in all states. Additionally, the states and federal government should make every effort to develop new programs and/or additional flexibility in innovative procurement approaches.
ASCE supports innovative mechanisms to procure and/or finance transportation projects, including, but not limited to:
- Mileage-Based User Fees (MBUF)/Vehicle Miles Traveled (VMT).
- Grant Anticipation Revenue Vehicles (GARVEEs).
- Infrastructure Banks.
- Public-Private Partnerships (P3s)
- Railroad Rehabilitation and Improvement Financing (RRIF) loans.
- Transportation Improvement Districts (TID).
- Transportation Infrastructure Finance and Innovation Act (TIFIA) loans.
- Transportation Special Purpose Local Options Sales Tax (TSPLOST).
- Private Activities Bonds (PABs).
- Advanced Refunding.
The above financing mechanisms should be considered in addition to more traditional funding means such as municipal bonds, motor vehicle registration fees, fuel taxes, electronic tolling, grants, and federal fund exchange (FFE) programs.
The sources of transportation funding are shifting more and more from federal to state and local resources to fund the growing need for transportation improvements. Innovative finance changes in recent transportation reauthorizations and the Infrastructure Investment and Jobs Act (IIJA) of 2021 are positive developments. The scope of these financing innovation should be expanded, and new program and approaches should also be introduced. New and innovative ways to finance critical transportation infrastructure are essential to meeting the mobility needs of the nation.
In addition, technological advancements are providing new capabilities, flexibility, and efficiencies for roadway pricing and collection of user fees. These capabilities should be fully explored to support innovative financing methods. The movement toward alternative fueled vehicles and reluctance to increase the federal motor fuel tax, which has not kept up with inflation, have created a greater need for innovative financing. A transition to new mechanisms, such as an MBUF/VMT, to fund transportation infrastructure is even more important.
Innovative financing techniques can greatly benefit infrastructure development by better leveraging available resources to deliver more capital. As such, they can have a powerful effect on delivering projects and public benefits sooner as compared to conventional methods. This has been the approach in many states where expanded and accelerated transportation investment programs have been successful. Innovative financing techniques, figure heavily in many of these state programs.
Financing alternatives cannot replace a public commitment to funding. Innovative financing techniques allow projects to be accelerated to deliver benefits sooner by efficiently borrowing against future revenues available for transportation funding. Without innovative financing programs, borrowing for project construction could be significantly more costly or not possible. Financing by any technique does not supplant the need for adequate user fees or other sources of revenue and funding to eventually pay for projects.
ASCE Policy Statement 496
First Approved in 2002