WASHINGTON -- Rep. Robert Borski, a senior member of the House Public works Committee, is pushing behind the scenes to include a $5 billion-a-year state infrastructure revolving fund program in the committee's highway bill, congressional aides said this week.
The Pennsylvania Democrat has not yet decided whether to pattern the proposal after the Clean Water Act's revolving fund program established in 1987 or establish a federal revolving fund to provide infrastructure loans to the states. An aide to Rep. Borski said the Clean Water Act's revolving fund "has its pros and cons."
The $2 billion-a-year clean water program, which finances water cleanup infrastructure projects, was the first to provide federal grants that could be used by states and municipalities to leverage the issuance of tax-exempt bonds and loans. Its sponsors said if the leveraging program were successful, it might be used as a model for other state infrastructure revolving funds. But some public works members have been questioning the program's success.
As an alternative, the committee could establish a federal revolving fund to provide low-cost infrastructure loans to the states. The federal fund would issue taxable bonds with federal guarantees, primarily to public pension funds, and aides said, and would be similar to existing federal secondary market corporations that promote housing, college lending, and other activities.
However the proposal is structured, as envisioned by Rep. Borski it would be much larger than the clean water program and would encompass all kinds of infrastrure projects from roads and mass transit to ports and airports, water and water treatment facilities, Rep. Borksi's aide said.
The program would be financed on a "pay as you go" basis with funding by a 5 cent federal gasoline tax increase that the committee's bill is expected to propose, he said. That levy has been estimated to raise between $5 billion and $6.6 billion a year.
So far, Rep. Robert Roe, D-N.J., the committee chairman who originally proposed the gas tax increase and has been promoting it as a "nickel for America," has not agreed to include the revolving fund proposal in the highway bill he has been drafting, the aides said. The chairman is expected to announce the measure and move to take action on it within the next few weeks.
The bill's authors reportedly have been considering using the gas tax increase to pay for, among other things, easing the 1986 tax-exempt bond curbs on infrastructure bonds, as well as a large number of highway demonstration projects. These items have been called "pork barrel" by opponents.
The National Governors' Association estimates that the committee has received requests from individual members of Congress for 125 highway demonstration projects totaling $7 billion, and 13 rail projects totaling $4 billion. An aide to Rep. Roe said he views the requests favorably and believes "they reflect the incredible need for higher funding" of the highway program.
Officials of the governors' association said they expect the committee to include many special projects in the bill to buy support for the gas tax increase, which will be difficult to pass as the presidential election nears.
With the special projects absorbing such a large portion of the bill's funding, little room for the infrastructure funding would remain, Rep. Borski's aide acknowledged. But he said if the proposal is not included in the draft bill, Rep. Borski may offer it as an amendment in committee.
In any case, Rep. Borski intends to first introduce the proposal as a separate bill. Once that is done, he expects to get more "feedback" from committee members, the aide said.
In drafting the proposal, the congressman also has not decided whether to distribute the federal money between the states using the highway program's current allocation formula, or follow a formula that takes into account a state's crumbling infrastructure needs as well as its share of federal gas tax collections, the aide said.
The allocation issue could raise some fiery sentiments in debate over the bill, just as similar allocation issues did last week when the Senate debated its version of the highway bill, the aide said. One reason for sticking with the current formula would be "to try to avoid squabbling," he said.
