The American Road & Transportation Builders Association (ARTBA) says new federal banking rules announced August 3 “will further impede state transportation planning and investments across the nation.”
Rules just approved by the U.S. Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation will preclude banks from using municipal bonds to comply with new liquidity standards.
“This decision will increase the financing cost of infrastructure projects for state and local governments by imposing a constraint on the market for municipal bonds,” ARTBA President & CEO Pete Ruane says. “That could also adversely impact development of public-private partnerships for transportation projects.”
In a letter to the Congressional leadership, Ruane urged they use the new banking rules “as another motivator to do what the vast majority of your colleagues have acknowledged needs to be done—develop a long-term, sustainable revenue solution to permanently stabilize the Highway Trust Fund (HTF) and support future state investments in transportation improvements.”
Ruane noted the temporary revenue patch for HTF-funded programs approved by Congress in July means the fund now faces another revenue shortfall “at the beginning of the 2015 construction season.”
Action on a long-term HTF revenue solution, Ruane wrote, “does not need to wait until May 2015.”