6,250 subscribers www.TML1.org Volume 66, Number 14 Sept. 14, 2015 Study finds municipal bonds save governments $700 billion in interest State’s transportation problems New ICMA report describes how access to tax-exempt focus of governor’s 15-city tour financing affects state and local infrastructure investment Haslam meets with legislators, local officals to discuss infrastructure needs State and local governments government, and their total par value would have paid $714 billion in is just over $3.6 trillion. Gov. Bill Haslam and John additional interest expenses between • If the federal tax exemption Schroer, Tennessee Department of 2000 and 2014 without tax-exempt for municipal bonds were repealed, Transportation (TDOT) Commis- municipal bonds, according to a new state and local governments would sioner, sat down with local and state white paper issued by the Interna- have paid $714 billion in additional officials from across the state in a tional City/County Management interest expenses between 2000 and 15-city tour to discuss the transpor- Association (ICMA) and the Gov- 2014. For a typical bond issue, this tation and infrastructure needs in ernment Finance Officers Associa- would mean $80-$210 in additional each region. tion (GFOA). interest expenses per $1,000 of bor- Among the cities visited were Other key findings from the new rowed money. Memphis, Clarksville, Jackson, public policy white paper, Municipal Infrastructure funding is one of Nashville, Franklin, Kingsport, Bonds and Infrastructure Devel- the most critical functions of state Greeneville, Murfreesboro, Shel- opment—Past Present and Future, and local governments in the United byville, Crossville and Union City. prepared by Justin Marlowe of the States. Together, these levels of gov- They plan to visit Chattanooga, University of Washington on behalf ernment are the main funders of the Cleveland, Lenoir City and Knox- of ICMA’s Government Affairs and public sidewalks, roads, highways, ville later this month. Policy Committee, include: bridges, and mass transit systems Throughout the meetings, • Virtually all state and local that Americans use to travel to Haslam and Schroer discussed the government capital investment is work each day, as well as the public functionality and capacity of Ten- financed through municipal bonds. schools, colleges, and universities nessee’s state roads and highways, • In 2014, state and local govern- in which our future workforce is safety issues around roads and bridg- ments invested nearly $400 billion educated. es, and the impact infrastructure has Photo by State of Tennessee photographic services in capital projects, a significant Tax-exempt municipal bonds, on economic development efforts in Gov. Bill Haslam and TDOT Comissioner John Schroer discuss state’s slowdown in spending. Total state a fundamental feature of the United urban and rural communities. transportation needs with state and local officials. and local capital spending has not States tax code since 1913, provide Tennessee’s transportation yet returned to pre-Great Recession a low-risk, cost-effective financing system includes 95,000 miles of these conversations are invaluable money from the General Fund. Fund- totals. tool for the construction of infra- roads, 1,100 miles of interstates, to the process.” ing uncertainty from the Federal • Approximately 90 percent of structure projects that are the lynch- 19,000 bridges, 28 transit systems Since 2010, TDOT has invested Highway Trust Fund forced TDOT state and local capital spending is pin of the U.S. economy, improving in 95 counties, 79 general aviation $101 million state dollars on first to delay $400 million in highway financed by debt. quality of life, creating jobs, and airports, 949 miles of waterways and and last mile road projects serving projects in 2015. • Alternative financing methods, sustaining economic development. more than 3,000 miles of railroads. industrial expansion and recruitment At each of the meetings, TDOT such as pay-as-you-go and pub- To download a copy, go to: cma. “The quality of Tennessee’s helping to create nearly 29,000 jobs officials discussed the cost of several lic-private partnerships, are effec- org/en/icma/knowledge_network/ transportation and infrastructure for 108 companies in Tennessee. pending projects within each region. tive for some types of capital proj- documents/kn/Document/307554/ system always ranks at or near the Funded primarily by state and See Pages 8 & 9 for more cov- ects, but are not a robust alternative Municipal_Bonds_and_Infrastruc- top when compared to the rest of the federal gas taxes, TDOT gets no erage of the meetings. to traditional, tax-exempt municipal ture_Development__Past_Present_ country,” Haslam said. “We have bonds. and_Future?utm_source=pressre- no transportation debt, and we do a Sen. Tracy sets transportation meetings • There are more than one million lease&utm_medium=email&utm_ great job maintaining our roads, but municipal bonds in the market today, content=text&utm_campaign=mu- we know we have challenges on the Senate Transportation and Safe- issued by more than 50,000 units of nibonds8-17-15 horizon. We know that we can’t de- ty Committee Chairman Jim Tracy pend on the federal government to be also plans to conduct meetings across the funding partner that it once was. the state to discuss Tennessee’s roads Nashville elects Megan Barry We also know that as our infrastruc- and transportation needs. Tracy said ture ages, maintenance becomes he wants to get input from a wide new mayor in runoff election more important and more expensive. variety of citizens and community And we know that maintaining our leaders regarding solutions to the roads is only part of the equation. challenges the state faces in funding Right now we have a multi-billion Tennessee’s transportation infra- dollar backlog of highway projects structure. across this state that address key Presentations will be made by access, safety and economic devel- Susan Mattson, principal legislative Sen. Jim Tracy opment issues, and that’s only going research analyst for the State Comp- needs of Tennessee’s transportation to grow.” troller, and Bill Moore, P.E., former system,” Tracy said. “Our needs are A 2015 Tennessee Comptrol- chief engineer at the Tennessee multi-faceted and there are several ler’s report on transportation funding Department of Transportation and options which have been offered. states that revenues are not expected Chairman of the Tennessee Infra- I want to hear from a wide variety to be sufficient to maintain current structure Alliance. Local legislators of citizens and community leaders infrastructure. Cars are more fuel will be invited to attend as well. regarding these options, as well as efficient, construction and labor “These hearings are to discuss other suggestions about what we can costs have risen, and Congress hasn’t solutions to fund the long-term do to improve our roads.” passed a long-term transportation funding bill in a decade. Tennessee’s DATES AND VENUES FOR TRANSPORTATION HEARINGS population is expected to grow by 2 million by 2040, which puts a greater • Nashville, Thursday, Sept. 17 Development District Office demand on the state’s infrastructure. 2 p.m., Legislative Plaza, Room 301 • Jackson, Thursday, Oct. 1 “TDOT is responsible for taking • Columbia, Tuesday, Sept. 22 2 p.m. Southwest Tennessee care of the assets we already have, 10 a.m. Cherry Theater, Columbia Development District Office for implementing current projects in State Community College • Knoxville, Thursday, Oct. 15 Photo by Jae S. Lee / The Tennessean the most cost-effective way, and for • Memphis, Tuesday, Sept. 29 10 a.m, Bridgewater Place planning for the state’s infrastructure Megan Barry was elected the seventh mayor of Nashville’s metropoli- 10 a.m., Shelby County Board of • Chattanooga, Wednesday, Oct. 28 tan government Sept. 10, making history as the first woman to hold the needs of the future,” Schroer said. Commissioner’s Chambers 2 p.m., Hamilton County city’s top office. Barry, who also became the first Metro Council member “We look to Tennessee communities • Huntingdon, Tuesday, Sept. 29 elected Nashville mayor, beat David Fox with 55 percent to 45 percent to help prioritize projects to make Commission Room of the votes in the runoff election; Barry had 60,519 votes compared to sure we’re addressing evolving traf- 6 p.m., Carroll Bank and Trust • Kingsport, Thursday, Oct. 29 49,694 for Fox. Barry will be sworn into office Sept. 25 to a four-year fic patterns, population growth, safe- Community Room 10 a.m., Kingsport Center for term. In her campaign, she pledged to keep Nashville moving forward ty issues, and the many other things • Martin, Thursday, Oct. 1 Higher Education and to continue with the progress forged by the Dean Administration. that impact our infrastructure, and 10 a.m., Northwest Tennessee Sparta’s Bluegrass Festival nominated for international award BY KATE COIL Sparta’s festival is named for TML Communications Specialist Lester Flatt, one of Sparta’s most famous native sons and an icon in Bluegrass has long been an bluegrass history. Flatt performed important part of the city of Sparta’s alongside Earl Scruggs as the guitar- heritage, and now the community is ist in the Foggy Mountain Boys and gaining international recognition for in “The Lester Flatt and Earl Scruggs their festival, which celebrates the Grand Ole Opry Show.” Flatt also history of bluegrass in the region as worked for a time in Bill Monroe’s well as introduces new generations band Blue Grass Boys. Sparta is to its all-American sound. also the hometown of American The 2014 Liberty Square – A bluegrass fiddler Benny Martin, Lester Flatt Celebration has been who worked with Bill Monroe, Roy nominated in the 2015 International Acuff, Flatt and Scruggs, the Stanley Bluegrass Music Award’s Bluegrass Brothers and many others during Event of the Year category. Sparta’s his career.