Murphy eyes federally backed loans to break rail project log jam
Published 2:26 pm, Friday, August 8, 2014
U.S. Sen. Chris Murphy, D-Conn, announced Thursday he will introduce legislation to speed up big-ticket projects like replacing the 118-year-old Norwalk bridge and modernizing the Metro-North New Haven Line by spurring private investment.
Improving and modernizing the New Haven Line and other aging rail systems between Boston and Washington, D.C., will rely more on private capital and public-private partnerships in the future, Murphy said, as federal and state governments can no longer finance the majority of infrastructure needs as federal gas tax proceeds dwindle.
States or regions would establish new revenues from highway tolls, rail fares or tax revenue to repay the loans, Murphy said.
This summer, Murphy, along with U.S. Rep. Bob Corker, R-Tenn., proposed two consecutive 6-cent increases to the 18.4-cent-a-gallon federal gas tax in 2015 and 2016 and then pegging the levy to inflation to help close the gap between needed transportation improvements and dwindling revenue streams. It would represent the first hike in the tax since 1993.
Murphy said the increased gas tax is necessary to keep the federal transportation coffers from continually running out of money.
"The gas tax is the clearest and most obvious way to broaden the pie, and then I'm proposing some out-of-the box ideas for financing specific proposals right now," Murphy said.
By assuring private lenders they will be paid back by the federal government if states default on loans, it will make it easier to garner investment for commuter rail projects, Murphy said. As opposed to highway projects, states have had more difficulty attracting investment because of uncertainty about fare revenue paying them back, Murphy said.
"We don't have a loan guarantee program for passenger rail projects right now," Murphy said. "If there is a federal backstop and a federal loan guarantee, we might have more willingness from private-sector lenders to get involved in bigger rail financing projects."
The bill would also include a second component to subsidize a new type of bond for non-revenue-generating rail projects, with the federal government picking up 80 percent of the interest.
Last year the Regional Plan Association identified $3.6 billion in investments through 2020 to maintain the current level of service on the New Haven Line and avoid a pattern of delays, equipment breakdowns and service outages caused by incidents like the May 2013 derailment of a train in Bridgeport that injured 76 people.
Replacing the rail bridge over the Norwalk River, which rotates to let large boats pass, and four other movable bridges in the state is estimated to cost $2.8 billion alone.
Those costs did not include major projects like straightening curves along the railway in Bridgeport and other locations to eliminate speed restrictions and other bottlenecks that raise questions about the ability to address future ridership increases.
Corporations and state business leaders are concerned that nearer term projects like replacing the Norwalk River bridge will move forward, but longer term goals like expanding speed and capacity will be dismissed as unrealistic and prohibitively expensive, said Joseph McGee, vice president of public policy for the Fairfield County Business Council.
"I think we're growing increasingly concerned that a state of good repair within 15 to 20 years puts us at a congested rail system," McGee said.