Transportation Economics & Finance Flashcards

Which financial instrument allows transportation agencies to borrow against future federal-aid apportionments to accelerate project delivery?

Answer: Grant Anticipation Revenue Vehicles (GARVEEs)

GARVEEs are debt instruments whose principal and interest are repaid with future federal-aid highway funds, allowing agencies to advance large projects.

What does the Transportation Infrastructure Finance and Innovation Act (TIFIA) program primarily provide?

Answer: Low-interest federal loans and credit assistance for major projects

TIFIA provides federal credit assistance — loans, loan guarantees, and standby lines of credit — at below-market rates to support large, creditworthy transportation projects.

In toll finance, what is the 'coverage ratio' used to measure?

Answer: Ratio of toll revenue to debt service requirements

The debt service coverage ratio measures whether toll revenues are sufficient to pay bond debt service, typically required to be at least 1.25–1.35x by bond covenants.

Which cost component is typically the largest in a highway Life-Cycle Cost Analysis (LCCA)?

Answer: User delay cost during rehabilitation

User delay costs during rehabilitation and reconstruction often dwarf agency costs in high-volume corridor LCCA studies, especially on major urban highways.

What is 'value capture' in transportation finance?

Answer: Recovering infrastructure costs from property value increases generated by the project

Value capture mechanisms allow agencies to recoup a portion of the land value uplift near new transit or highway infrastructure to help fund transportation improvements.

Which program under the Bipartisan Infrastructure Law provides formula funding to states for bridge replacement and rehabilitation?

Answer: Bridge Formula Program (BFP)

The Bridge Formula Program (BFP) distributes $26.5 billion over five years to states by formula for bridge replacement, rehabilitation, preservation, and protection.