Bill description: Senate Bill 1065 would allow the state Department of Transportation to take out bonds for the Transportation Expansion and Congestion and Mitigation Program.
Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?
The Transportation Expansion and Congestion Mitigation (TECM) program was established in 2017 to “finance projects that expand the state system to address and mitigate transportation congestion.” Under current law, the department can use the money appropriated for this program to finance projects that would accomplish these objectives. These projects cannot be accomplished by taking on debt, however.
SB 1065 would give the state Department of Transportation authority to take on debt to finance projects for this program. These bonds would be issued through the Idaho Housing and Finance Authority.
To service the debt, SB 1065 would require at least $15 million to be appropriated to the TECM fund every year going forward. The current statutory distribution to this fund is one percent of the total sales tax revenues to the state. In FY 2018, this amounted to $22.7 million.
This $15 million minimum could take state revenue away from other projects, particularly in years when the economy takes a downturn and total sales tax collections fall.
With the passage of SB 1065, the department would end up paying a lot to service the debt, paying not only the principal but the interest and fees associated with it.