State Infrastructure Banks and Intergovernmental Subsidies for Local Transportation Investment |
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| Authors: | JUITA‐ELENA YUSUF GAO LIU |
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| Affiliation: | 1. Old Dominion University, 2096 Constant Hall, Norfolk, VA 23529;2. Martin School of Public Policy and Administration, University of Kentucky, 419 Patterson Office Tower, Lexington, KY 40506 |
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| Abstract: | This study reviews State Infrastructure Banks (SIBs) as an innovative financing mechanism for federal and state governments to support transportation financing for local governments, and determines the cost savings realized by local governments from receiving SIB loans rather than financing through the municipal bond market. The study finds that SIBs provide a mechanism through which local governments receive subsidized loans for their transportation investments. With the Ohio SIB, localities realized average borrowing cost savings between 34 and 184 basis points. Under the worst‐ and best‐case scenarios, 83 and 98 percent of projects, respectively, benefited from lower borrowing costs. |
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