Established by Congress in 1998, the Transportation Infrastructure Finance and Innovation Act loan program (TIFIA) has played a crucial role in financing numerous large-scale transportation projects that otherwise might not have been built because of their size and complexity. Unlike a grant program, TIFIA provides loans and loan guarantees to public and private entities to help finance highway, transit, intercity passenger facilities, and freight rail projects. In a recent blog post, U.S. Sec. of Transportation Ray LaHood wrote, “A little TIFIA can go a long way,” and he’s right: Each dollar of federal funds can provide up to $10 in TIFIA credit assistance and leverage $30 in transportation infrastructure. Funding for TIFIA was increased tenfold in H.R. 4348, MAP-21, the new transportation reauthorization. TIFIA is now authorized at $750 million next year and $1 billion in 2014, up from $122 million. That could fund about $10 billion in project loans. 

TIFIA was created because state and local governments had trouble financing major transportation projects backed by revenues that are difficult to predict, such as transit sales taxes, tolls, or tax increment financing (TIF). TIFIA helps by providing low interest loans (pegged at the Treasury rate) at attractive repayment terms to close the funding gap for these projects and leverage local and private investment.

TIFIA assistance has advanced numerous transit projects across the country. The Chicago Transit Authority will combine an $80 million TIFIA loan with federal TIGER funding, bond sales, and other state and federal funds as part of an overall $240 million funding package to renovate the Red Line’s 95st Street Terminal, one of the its busiest. The intermodal project will reduce pedestrian and bus congestion, cut travel times, improve accessibility, and be a catalyst for new economic development on Chicago’s south side. 

Continue reading this edition of Talking Transit >>

Get In the Loop on the latest local, national, and international transportation headlines. >>