As described in this chapter, potential government roles supporting transportation infrastructure finance include increasing the overall availability of capital, reducing the cost of capital, improving access to capital, and enhancing the flexibility of available financial terms. Current adverse market conditions notwithstanding, the Commission believes that, over the longer term, there generally will not be a lack of investment capital for transportation infrastructure. There are, however, particular identified market gaps that federal and state policy makers should continue to address, including the need for "patient" subordinate or conditional capital for large projects financed with direct user fees and the need for low-cost capital for small projects with dedicated revenues. Identified opportunities also exist to deploy carefully structured tax and other financial incentives to encourage state and local project sponsors and potential private-sector partners to invest in certain projects that generate significant public benefits but that cannot be fully monetized by users or other direct beneficiaries.
Chapter 8 provides a number of specific recommendations to create new or expand upon current federal programs and policies designed to facilitate the financing of infrastructure projects by state, local, and private sponsors. These recommendations are based on the Commission's general findings:
• Individual finance-related recommendations will have very limited positive impact if they are not coupled with substantial net new resources for surface transportation; further, these new revenues should be strongly linked to use of the system.
• The federal government should work to help make appropriate new financing solutions available and generally encourage more financing flexibility where feasible and in the public interest, recognizing that no solution is one-size-fits-all.
• A new national financing entity, if carefully structured and targeted, may be positioned to improve the allocation of federal resources but will not solve the funding crisis facing the nation's transportation system. Looking beyond the current market disruption, the fundamental infrastructure investment problem is not a lack of capital sources; rather, it is a lack of underlying revenues (whether tax-backed or user-backed) to repay debt investors or provide a return to equity investors.
• There is an important continuing opportunity to take advantage of private-sector financial participation in accelerating the development of new transportation infrastructure ("greenfield" projects) with revenue generating capacity, contingent on proper attention to protecting the public interest. Asset monetizations ("brownfield" conversions), on the other hand, are more highly situational opportunities and will have a narrower role.
• Potential government credit assistance, financing incentives, tax subsidies, and direct funding contributions should be thought of as a continuum in terms of the degree of subsidy provided and should be carefully targeted to clearly identified investment needs or market gaps. Finally, while there has been considerable focus in recent years on the financing mechanisms and related government policies discussed in this chapter, it is important to bear in mind, as evidenced by the statistics provided here, that even if used to maximum benefit these tools are applicable to a relatively narrow range of projects and will not substitute for core funding programs.