ARTBA wrote a September 4 letter to Congressional leaders warning that new federal banking rules “will further impede state transportation planning and investments across the nation.”
Rules announced last week 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,” said ARTBA President & CEO Pete Ruane. “That could also adversely impact development of public-private partnerships for transportation projects.”
ARTBA’s letter urged Congress to 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.