The Republican leaders of the Idaho House and Senate Transportation Committees don’t see eye to eye on the state program that borrows money for several road construction projects, with future road money from the federal government footing the bill for years to come.
The Idaho Transportation Department wants to spend $162 million on the Grant Anticipation Revenue Vehicle (GARVEE) in the next fiscal year. Rep. Leon Smith, R-Twin Falls, said adding that amount to the $657 million already spent could create a catastrophe down the road.
“At some point, we’ve got to say enough is enough with GARVEE bonded indebtedness,” Smith said Thursday. He called the GARVEE program “stimulus by debt,” since it creates transportation jobs, but requires future payments from money for Idaho roads. ITD says GARVEE has created or sustained 11,400 jobs.
The main concern for Smith is that Idaho’s share of federal road funding could drop, as Congress prepares to reauthorize its national highway spending plan. If Idaho ends up getting less money from the feds, the share that GARVEE payments take up could eat up money for other new projects, including replacing aging roads and bridges.
A recent report from the Congressional Budget Office, which tracks federal spending, found that the trust fund used to make payments has run out of money three times since 2008 and could be unable to meet its obligations during the next fiscal year.
Smith’s Senate counterpart, Sen. Jim Hammond, R-Coeur d’Alene, backs the additional GARVEE spending. The $162 million could wrap up ITD’s six projects that are part of GARVEE, and Hammond said ITD should be allowed to complete the job. In 2006, lawmakers approved using $998 million in GARVEE bonds to fund critical improvements of six transportation corridors: U.S. 95 from Garwood to Sagle, U.S. 95 from Worley to Setters, I-84 from Caldwell to Meridian, I-84 from Orchard to Isaacs Canyon, Idaho 16 from I-84 to South Emmett, and U.S. 30 from McCammon to Soda Springs.
“It makes no sense not to finish out the project now,” Hammond said. He also said the project has been a success, since ITD has gotten good rates for its projects, due to the downturn to the construction industry during the recession. He compared the borrowing plan to buying low on stock, since the cost of roadwork will likely increase.
Hammond agreed with Smith that there is some uncertainty about the future of federal funding, which is why lawmakers should hold off on any new bonding for roadwork once the GARVEE projects are finished.
Hammond and Smith spoke to the Joint Finance-Appropriations Committee (JFAC) Thursday. That committee, which writes the state budget, will cast the first vote on whether to allow ITD to borrow more money. Last year, lawmakers on JFAC cast several split votes before lowering ITD’s request for GARVEE bonding from $26 million to $12 million.