GARVEE debt service bill ekes through House

Legislation seeks to curtail payments

BOISE - A bill to curtail debt service payments on a statewide road construction borrowing program survived a House vote on Tuesday.

House Bill 581 cleared the House on a 42-28 vote, but it's now bound for the Senate Transportation Committee, where at least one North Idaho member of the panel has expressed opposition.

Rep. Ken Roberts, R-Donnelly, said in debate he figured that HB 581, with its 20-percent-of-federal roads funding for Idaho limit - down from the 30 percent in current law - would slice more than $300 million in revenue bonding authority from the “Connecting Idaho” program started three years ago by now-former Idaho Gov. Dirk Kempthorne.

HB 581, Roberts said, would put the total for current and future projects under the Grant Anticipation Revenue Vehicle (GARVEE) funding mechanism at approximately $667 million, down from $998 million in bonding authority under the revised Kempthorne plan.

“If we're going to do this, know this: we're going to have to come back and increase the revenue stream substantially if we're going to continue with these corridor projects and the (non-GARVEE) projects,” Roberts said, referring to potential increases in the vehicle registration fees and fuel taxes.

“I don't think it gets us any further ahead,” said Sen. Shawn Keough, R-Sandpoint, while also stating that this year's Legislature still likely will need to raise revenue for non-GARVEE projects through increases in vehicle registrations or fuel taxes.

Supporters of HB 581 said the Legislature should minimize bond purchases to keep the state-paid interest and principal payback lower.

“This bill is trying to put a handle on our GARVEE bonds, and trying to provide guidance to future Legislatures not to go too far out on a limb,” said Rep. Leon Smith, R-Twin Falls.

Keough said in-progress road construction projects in GARVEE should be completed with the $998 million.

“For me, it (GARVEE) is a tool, that if used wisely, gets us roads at a cheaper price,” said Keough of the idea of jumping ahead of inflation with bonding for needed road and bridge improvements instead of pursuing slower, more gradual projects, that lag far behind skyrocketing construction costs.

While unaffected would be the $134 million in the next GARVEE installment for the state budget year starting July 1, under Roberts' estimates on HB 581, only $83 million would be left for future work on the six in-progress projects, expected to cost $401 million during state fiscal years 2010 and 2011.

The Idaho Transportation Department has projected that it would need $89.4 million alone for the state fiscal year 2010 portion of the U.S. Highway 95 Garwood to Sagle reconstruction and right-of-way acquisition project in Kootenai and Bonner counties. The additional $89.4 million for the estimated $178.4 million Garwood to Sagle project has been forecast by the ITD for that state budget year starting July 1, 2009.

“We've made commitments to the people on those (transportation) corridors,” Keough said. “There's a public expectation out there that we need to keep those commitments.”