Sale of delayed road bonds began in 2010
Bob McDonnell vowed to improve Virginia"s highways when he ran for governor in 2009.
"While the General Assembly authorized $3 billion in bonds in 2007, not a single dollar of that money has been issued as of today,” his campaign said in a policy paper on transportation. "McDonnell will ensure that these bonds are issued beginning in 2010.”
In 2007, the General Assembly approved selling $3 billion in revenue bonds for transportation projects. But those sales were delayed because state transportation officials had trouble finding shovel-ready projects and declining transportation revenues raised concerns about Virginia taking on new debt.
Since coming to office in January 2010, McDonnell has taken a number of steps to identify projects and borrow the money. He convinced the General Assembly to expedite the sale of much of the bond package, which was originally scheduled to be issued steadily over 10 years. McDonnell argued that Virginia should borrow while interest rates are low.
The first $493 million in revenue bonds were sold in May 2010 and an additional $600 million was issued in May 2011. Taylor Thornley, deputy director of communications for the governor, said bond sales of $600 million are planned for May 2012 and May 2013. Smaller sales are scheduled through 2020 as revenue is available for debt service.
In addition, McDonnell last year persuaded the General Assembly to issue $1.1 billion in bonds that are backed by future federal transportation revenues Virginia anticipates. The bonds are are called GARVEEs, short for Federal Transportation Grant Anticipation Revenue Vehicle.
The first sale of GARVEEs, generating $298 million, was Feb. 15, 2012. Thornley said other issuances will occur in the next three years "as needed to support major highway construction projects.”
The revenue bonds and GARVEEs are paying for projects across the state, including the rehabilitation of 11 bridges on I-95 in the Richmond Highway district, the construction of truck-climbing lanes on I-81 and a new interchange on I-264 in Hampton Roads.
Many Democrats say the borrowing will barely make a dent in Virginia"s pressing transportation problems and that the state needs to raise its gas tax. McDonnell disagrees.
But the governor, true to his word, has started the process of selling the revenue bonds authorized in 2007. We rate this a Promise Kept.
McDonnell for Governor, "McDonnell Unveils Comprehensive Statewide Transportation Plan,” July 21, 2009.
Email from Taylor Thornley, deputy director of communications for McDonnell, Feb. 17, 2012.
Richmond Times-Dispatch, "Virginia business briefs for May 13,” May 13, 2011.
Richmond Times-Dispatch, "Business leaders endorse McDonnell"s transportation plan,” Jan. 23, 2011.
Richmond Times-Dispatch, "Differing transportation bills heading to conference,” Feb. 18, 2011.
Richmond Times-Dispatch, "State bonds get high ratings, are sold for roads program,” May 13, 2010.
The Virginian-Pilot, (Norfolk, Va.), "McDonnell outlines his $4 billion road plan,” Jan. 15, 2011.
Gov. Bob McDonnell, "Governor McDonnell Signs Historic Transportation Investment Legislation,” April 18, 2011.
Richmond Times-Dispatch, McDonnell authorizes sale of transportation bonds, May 1, 2010.