Lobby group backs bonds for highways
BOISE – Plans to issue bonds to pay for major road construction across the state, including along U.S. Highway 95, got a major boost last week when they were endorsed by the state’s most influential business lobby.
“Idaho would feel a positive economic impact from an accelerated program of highway construction,” the Idaho Association of Commerce and Industry declared in its agenda for the upcoming legislative session.
Gov. Dirk Kempthorne will unveil his bonding plan when he gives his “State of the State” message to a joint session of the Legislature on Jan. 10. But he told lawmakers last month that it will address major road problems in every region of the state, and that it will include Highway 95. Kempthorne’s Transportation Department has been drafting legislation to allow the state to issue “GARVEE” bonds, a type of bonding authorized by Congress in 1995 that allows states to borrow against their future federal highway allocations.
Steve Ahrens, president of IACI, said the business group has some concerns about how details of the plan would work, but voted to endorse the concept.
“If we can accelerate construction of badly needed projects, that is going to help the whole state,” Ahrens said.
Though details haven’t been announced, the plan could potentially speed up such major upgrades as a freeway from Coeur d’Alene to Sandpoint, four lanes from Lewiston to Moscow and possibly four lanes all the way from Moscow to Coeur d’Alene. It also could potentially fund the long-studied Indian Valley route, a southern Idaho stretch of Highway 95 that, if constructed, could cut 45 minutes off the trip from North Idaho to Boise.
Kempthorne is touting his plan as a way to help connect the state. Idahoans long have bemoaned the substandard state of Highway 95, the state’s only north-south highway, which in many stretches remains a twisting, dangerous two-lane road.
IACI said in its newly approved 2005 legislative agenda that the bonding idea has appeal for several reasons. State fuel taxes and registration fees aren’t keeping up with the need for highway construction funding, the organization said. And by borrowing against future federal allocations and building the roads now, the state would avoid inflationary increases in the costs of the projects.
GARVEE bonds, which stand for Grant Anticipation Revenue Vehicle, are tax-exempt, which makes them attractive to investors. They work by essentially buying insurance that future federal highway payments will come in.
Idaho receives about $200 million a year in federal highway funds, and has received funding every year since at least 1918.
Ahrens said IACI’s concerns are that the proposal be structured to leave the state enough flexibility to address ongoing road construction needs; that local governments get some input into identifying projects; that projects reduce highway congestion and promote air quality; and that the plan overall be designed to both improve transportation and enhance commerce.
“I think it is likely that the governor will carefully craft that legislation to address what really are pretty obvious concerns,” Ahrens said.
Fourteen states now use the bonding mechanism, and another four states have authorized the bonds but not used them yet. Most of the states are back east, but they include California, Arizona and Colorado, which used the bonds to fund a major upgrade of its interstate system in the Denver metropolitan area.
IACI, Idaho’s biggest business lobby since 1974, represents close to 300 Idaho businesses ranging from agriculture and food service to technology, banks, utilities, manufacturing and construction, along with chambers of commerce and other business-oriented groups from around the state.