Deal, GDOT Announce 285/400 Interchange Funding Plan

May 16, 2014 9:30 am

by Eric The Younger · 9 comments

This is especially significant given the current state of the  Highway Trust Fund. Hopefully the money that was found via motor fuels tax reserves and $130m in bonding does not place too much more of a burden on the debt service for GDOT. It’s already at ~$250 million a year. Here’s the full press release.

Governor: Approved changes allow Georgia to advance construction phase for Perimeter project

Gov. Nathan Deal today announced a state commitment to fully fund improvements to the I-285/Ga. 400 interchange, a project of statewide significance. Deal and Georgia Department of Transportation board members approved the sale of $130 million in previously authorized bonds and the use of $81.5 million in accrued state motor fuel funds to accelerate the process of reconstructing the I-285/Ga. 400 interchange.

“We are currently utilizing all the tools that the state has available — accrued motor fuel revenues, authorized bonds, Georgia’s AAA bond rating and an improving schedule of debt payments — to facilitate major transportation projects,” said Deal. “This interchange is one of the most congested intersections in the United States, and the time has come to bring much needed relief to commuters and area businesses. Improvements to the interchange will provide important economic and quality of life benefits and will expand Georgia’s role as a major logistics hub for global commerce.

“This funding plan will provide a stop gap measure that will allow us to continue working on Georgia’s transportation priorities as we wait on Washington to reauthorize the federal transportation bill.”

The nation’s current transportation authorization expires Sept. 30, but will run out of money this summer. Critical transportation projects are needed through the summer and into the fall, and this plan will allow the state to continue working on these projects. Additionally, the state needs to be ready to move as quickly as possible into the construction phase of I-285/Ga. 400 once the environmental approval occurs, currently on track for 2015.

“When federal funds start flowing to the state again, this plan will allow Georgia to advance the 285/400 project while minimizing the impact on the existing statewide transportation plan,” Deal said.

To complete the funding of the I-285/Ga. 400 interchange and Ga. 400 collector-distributor projects, GDOT will utilize a public-private partnership model similar to the recent I-75 Northwest Corridor project to spread payments across several years.

“The department is committed to working with the governor to deliver statewide projects that have great value and impact for our citizens as early as financially possible,” said GDOT Commissioner Keith Golden. “This step allows us the opportunity to keep Georgia moving forward through vital summer construction months, supports jobs for Georgians and enhances the long term commitment to our growing transportation system.”

{ 9 comments… read them below or add one }

Rambler14 May 16, 2014 at 9:49 am

Short-term band aid for 1 project with possible long term implications (as discussed, additional debt service)

Dave Bearse May 16, 2014 at 9:53 pm

You may want to check that $250M annual bond indebtedness payment figure. This morning’s AJC column on the interchange stated “GDOT is saddled with roughly $400M in debt payments every year of for projects it [or rather good ol' Sonny] sought to fast forward in the past decade.”

I suspect the $250M is only the General Obligation (GO) bond debt, and doesn’t include either General Revenue Bonds (GRB) or GARVEE bond payments, or both, each of which are in the multiple tens of millions annually.

A $400M debt places GDOT debt approaching 40% of revenues. Where have we heard that figure before? Isn’t that the same debt fraction as Washington? Sure there was significant GDOT debt in 2002, but the absolute and relative debt amounts have significantly increased since then.

It’s the GaGOP emulating the line of BS the GOP ran at the federal level for 30 years—talk about a balanced budget while in the minority and unable to implement policies, then increase indebtedness after attaining a majority.

And that $130M in bonds for the interchange? Increase that GDOT debt payment by another $7M annually.

GARVEE by the way stands for Grant Anticipation Revenue Vehicle, bonds to be repaid with future federal funds dispensed from the federal Highway Trust Fund—which may be why they’re omitted from some measures of indebtedness.

Look for continuing resolutions when that Highway Trust Fund goes into the red around election time because a GOP House can’t abide a gas tax increase. All is not lost however. There’s a lame duck session when we may be treated with the GOP budget leadership we’ve come to expect.

Harry May 16, 2014 at 11:11 pm

You do know the GOP debt increases aren’t in the same ballpark with Obama’s.

Dave Bearse May 17, 2014 at 11:26 am

Or either Bush, or St. Ronnie.

Harry May 17, 2014 at 12:25 pm

None of that is in the ballpark with Obama. Run the numbers.

Will Durant May 17, 2014 at 1:42 pm

As you should run the numbers on your feeble attempt to deflect the past issues of the Sonny and Gena show which is to as close to Obama™, The New Cuss Word, as aardvark is to zyzzyva.

Dave Bearse May 18, 2014 at 1:47 pm

Will and I very likely disagree on many things, but he recognized the point I was making—the experience of GOP majority government is that talk of fiscal responsibility is hat and not cattle.

Harry May 17, 2014 at 12:40 pm

Is building out interchanges the solution or enhancement of the problem?
http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

The Last Democrat in Georgia May 17, 2014 at 1:44 pm

The announcement of the long-overdue upgrade of the I-285/GA 400 interchange goes a long way towards helping Governor Deal’s re-election prospects. That’s because the interchange affects hundreds-of-thousands of commuters each day from the politically-crucial areas of North Fulton, Cobb, Cherokee, Forsyth and even Gwinnett.

If Deal can keep his ethical troubles out of the media the rest of the way, this project likely will provide him with the margin he needs to overcome his political vulnerabilities and clinch re-election.