TODAY'S ROADS WITH TOMORROW'S DOLLARS: USING GARVEE BONDS TO FINANCE TRANSPORTATION PROJECTS

This paper discusses the rationale behind and proposed use of Grant Anticipation Revenue Vehicles (GARVEEs) as a way to finance transportation projects. GARVEEs are notes, bonds, or other financial tools whose issuance is based upon future projections of federal aid for transportation. The use of GARVEEs allows states to begin transportation projects sooner rather than later; it allows them to begin projects for which they anticipate funding, even if the funding has not yet been received. The paper discusses the utilization of GARVEEs for both highway and public transit funding. It describes types of GARVEEs, and relates their pros and cons.