Largely through accelerated borrowing, Gov. Bob McDonnell is proposing to funnel $4 billion to road projects by the end of his administration.
He rolled out pieces of his transportation plan Thursday at the Governor's Transportation Conference in Roanoke in stressing the need to jump-start road projects in this economy.
"I want to make clear: Right now is the best time in modern Virginia history to get new roads and bridges built," McDonnell said. "First, construction prices have fallen dramatically due to competition and the state of the economy. Second, interest rates are at historic lows for our triple-A bond-rated state."
In the near term, McDonnell wants to expedite the sales of bonds approved in 2007, and to change state law to allow a new kind of bond financing.
McDonnell will push for a constitutional amendment to protect the state's transportation fund from transfers to the general fund, and to create a transportation infrastructure bank with $150 million in surplus funds and $250 million identified in a recent audit of the Virginia Department of Transportation.
The transportation bank would offer low-interest loans and grants for projects.
A key piece of his plan requires a change to state law to allow a kind of bond that is repaid through future federal highway funds. McDonnell wants to issue at least $1.1 billion in those bonds and use toll credits for a state match.
He identified the Broad Street corridor in Richmond as one of the projects that could benefit from these funds.
The $4 billion would about double the state's transportation construction program during the next three years.
"If you're going to buy it," state Transportation Commissioner Gregory A. Whirley said, "now's the time to buy."
McDonnell's plan comes at a time when the cost to taxpayers to finance Virginia's debts has grown sharply and, in what could be a warning to McDonnell, Senate budget-writers expressed concern about the state's debt capacity at their last retreat.
Brian Moran, chairman of the Democratic Party of Virginia, struck the same chord in response to McDonnell's plan Thursday.
"We must have missed the announcement when Bob McDonnell hired Jim Gilmore as his budget director," he said.
"Between the $1.8 billion in state bonds and the $1.1 billion in GARVEE bonds that are a gamble against federal highway dollars that are not guaranteed to exist in the future, this plan would lead to a dangerous explosion in public IOUs at a time when Virginia taxpayers already spend more in debt service than we spend on sheriff's offices," Moran said.
The funding package is missing two components that McDonnell promoted during his campaign for governor: revenues from offshore energy drilling and liquor-store privatization.
President Barack Obama's administration this month continued a ban on drilling off the Atlantic coast, which means there will be no lease sales for drilling off Virginia until at least 2017.
The governor is promising another proposal to get the state out of the liquor business. His initial proposal faced widespread opposition among legislators.
McDonnell is expected to unveil his entire roads plan and a detailed project list in January.
omeola@timesdispatch.com
(804) 649-6812
Peter Bacqué and Jim Nolan contributed to this report.
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