PROVIDENCE, RI (AP) The Senate Finance Committee has considered borrowing $822.5 million for projects involving the state’s bridges and highways, T.F. Green Airport and two public colleges.
The projects would cost up to $1.2 billion, assuming interest rates of up to 6 percent and other expenses. The bonds would be paid back in 20 to 30 years.
Officials testified June 13, saying the need to borrow was urgent because federal dollars for the projects required state money now or because they say the state’s infrastructure is deteriorating.
The House and Senate will review the borrowing proposal, which is expected to be voted on in coming weeks as both chambers push through next year’s budget, The Providence Journal reported.
Approximately $660.5 million would go to the state Department of Transportation for five projects: a new Washington Bridge connecting Providence and East Providence, a new Sakonnet River Bridge between Portsmouth and Tiverton, the next phases of the Route 195 relocation, a freight rail project serving Quonset Point and the next phase of improvements to Route 403, Transportation Director James R. Capaldi has said.
Instead of waiting for federal funds for these projects, Capaldi has proposed using a relatively new form of borrowing called a Grant Anticipation Revenue Vehicle. Given the approval of the Federal Highway Administration, the state would sell bonds and use future federal highway aid as it comes in to pay back the bonds and the interest.
The Rhode Island Airport Corp. hopes to borrow $65 million to move its explosive-detection machines out of the terminal’s ticketing area as part of an upgrade to an automatic baggage-handling system.
Other expenses are built into the bond, including $2 million for insuring the loan — a practice that usually provides a better interest rate — the creation of a $6.3-million bond reserve and $8.3 million to “capitalize” interest, meaning the airport corporation would borrow money to make its first year’s principal and interest payments.
The federal Transportation Security Administration said last month that T.F. Green and 19 other U.S. airports would probably receive funding to integrate the explosive-detection machines into an automatic bag-sorting system in an effort to speed up the screening process.
Michael Cheston, the airport corporation’s executive director, said T.F. Green will probably get the grant because it has plans ready to go.
The state would have to pay for the entire project cost and then be reimbursed by the federal government for most of the expenses. Cheston said that if the state does not come through with the cash the TSA might select another airport.
The federal government would cover $27.8 million of the costs. The airport would be responsible for the rest.
Another $87 million would be borrowed to finance construction projects at the University of Rhode Island and Rhode Island College.