Mayor in Driver’s Seat

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When the Transportation Infrastructure Financing and Innovation Act program was first established, it was largely ignored. After all, it was created at a time when federal spending and earmarks still seemed endless and plentiful.

But as gas tax revenues have declined and states have struggled to maintain their aging transportation networks, TIFIA has become wildly popular. In fact, the level of TIFIA financing requested in the last two annual cycles has been more than 10 times the amount appropriated to it.

Signed into law last month and known as MAP-21, the new federal transportation bill included a major overhaul of TIFIA. Funding was dramatically increased from $122 million in fiscal year 2012 to $750 million in fiscal year 2013 and $1 billion the following year. Federal lawmakers also decided to declare projects eligible for TIFIA based solely upon a project sponsor’s ability to repay its loans, thereby eliminating a previously used scoring system that moved applications forward based on a series of subjective criteria.

There’s one major metropolitan region that is poised to benefit from these changes as soon as they are implemented: Los Angeles. It’s no coincidence that it’s the very same place where the plan to rewrite TIFIA was conceived.

In 2008, Los Angeles County officials proposed Measure R to increase the county’s sales tax by a half-cent, thereby generating $40 billion in new revenues to pay for a full slate of gridlock-easing highway and transit projects over the next three decades. Assured that the dramatic influx of public spending would create hundreds of thousands of construction jobs, traffic-weary Angelenos approved the measure by a whopping two-thirds margin.

Officials at the Metropolitan Transportation Authority quickly realized that their electoral achievement had unlocked a massive opportunity, which became known as the 30/10 Initiative. By pledging a portion of the stream of anticipated Measure R revenues as a funding mechanism for federally backed loans in the form of bonds, the county could potentially stretch its revenues far beyond what they could buy without the leverage. The initiative would save more money, create more jobs, and deliver projects more quickly. Metro determined that if it could secure a $2.3 billion TIFIA direct loan to monetize the Measure R revenue stream more efficiently, all of the proposed infrastructure projects could be completed not in 30 years, but in 10.

Congressional rewrite

Knowing that TIFIA was too small to come close to meeting the region’s needs, Metro officials realized that the only possible solution was to somehow get Congress to rewrite the program. More specifically, TIFIA would need to allow the U.S. Transportation Department to make upfront credit commitments on large programs of related projects, increase the maximum allowable portion of federal funding committed to a project from 33 percent to 49 percent and eliminate the selection criteria by qualifying any creditworthy project. Then they’d need to convince Congress to authorize a huge boost in funding.

That bureaucrats at Metro could get Congress to restructure a hugely popular federal program and provide a massive funding increase was beyond ambitious; it was preposterous. Plus, who had the raw ambition, legislative prowess and personal clout – not to mention the free time – required to jet back and forth to D.C. to make it happen?

Term-limited and hungry to establish a national profile, L.A. Mayor Antonio Villaraigosa stepped forward, immediately rebranding the 30/10 Initiative as a national lobbying campaign called America Fast Forward. He won over his colleagues at the U.S. Conference of Mayors, nearly all of whom represented cities facing infrastructure funding challenges of their own. He made frequent trips to Capitol Hill to visit the leadership of both the AFL-CIO and the U.S. Chamber of Commerce. Both organizations ultimately endorsed America Fast Forward, undoubtedly encouraged by the mayor’s tremendous job-creation projections.

He also visited and secured unqualified support for his plan from the pivotal transportation policymakers on Capitol Hill, Rep. John Mica, R-Fla., chairman of the House Transportation Committee, and Sen. Barbara Boxer, D-Calif., Environment and Public Works Committee chairwoman. In the end, America Fast Forward was not only included in the final legislation, but at twice the funding level Villaraigosa requested.

When asked recently about when Metro plans to begin submitting TIFIA applications, the director of federal affairs answered, “Immediately.” The race for billions in low-interest TIFIA loans is about to begin and thanks to Measure R and the mayor’s efforts in Washington, the county is flush with cash and the rules of the game have been changed to benefit Los Angeles. Some have even taken to calling Villaraigosa, “America’s Transportation Mayor.”

With the head of the Transportation Department, Ray LaHood, having already announced his departure if President Obama wins a second term, one wonders if Villaraigosa’s next title might be “America’s Transportation Secretary.”

Michael S. Wojnar is a senior adviser on transportation and infrastructure policy at McKenna Long & Aldridge, a law firm with offices in downtown Los Angeles. He also is a former transportation policy staffer on Capitol Hill.

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