Local Government Financing Tools

With a growing population and ever-expanding economy, the demand for transportation infrastructure has far outpaced resources.

Fortunately, the state Legislature has helped establish state and local financing tools to assist local governments with transportation projects. TxDOT is a resource for local governments to explore these and other available options.

• State Infrastructure Bank Loans: The State Infrastructure Bank (SIB) is a revolving loan fund that allows borrowers to access capital funds at or lower-than market interest rates. SIB financial assistance can be granted to any public or private entity authorized to construct, maintain or finance an eligible transportation project. Visit State Infrastructure Bank for details.
• Transportation Reinvestment Zones: A transportation reinvestment zone (TRZ) is an innovative financing mechanism in which captured ad valorem tax increments are set aside to finance transportation projects. Visit Transportation Reinvestment Zones for more information.
• Regional Mobility Authority: A regional mobility authority (RMA) is a political subdivision formed by one or more counties to finance, acquire, design, construct, operate, maintain, expand or extend transportation projects. These projects may be tolled or non-tolled. The Texas Legislature authorized RMAs in 2001 to provide a flexible way to address local transportation needs and to develop projects quickly. Individual counties or multiple counties can create a single RMA entity. They receive funding for initial project development from the sale of bonds. They may also seek a loan or grant from TxDOT. See a list of regional mobility authorities. 
• Local Funds and Fees: Local governments collect various fees and taxes to generate revenue for transportation projects. This local revenue in combination with state and federal funds can finance eligible transportation projects. For more information on tax-related programs, visit the state Comptroller’s site.
• Transportation Investment Generating Economic Recovery (TIGER) Discretionary Grants: This U.S. Department of Transportation program provides an opportunity for state and local governments, metropolitan planning organizations, transit agencies and port authorities to invest in road, rail, transit and port projects that promise to achieve critical national objectives. Each round of the TIGER program is different, but grants are generally awarded for capital investments in surface transportation infrastructure on a competitive basis. For more information see TIGER grants.
• Comprehensive Development Agreements (CDAs) and Public-Private Partnerships (P3s): These are agreements with private entities that allow for greater private sector participation in the delivery and financing of transportation projects. Visit partnerships for more information.
  
• Transportation Development Credits: Toll or transportation development credits are a federal transportation funding tool that states can use to meet federal funding matching requirements. Visit transportation development credits for details.

Note: This site does not describe all financing options that may be available to local governments for transportation projects, and not all options described are applicable to all projects or all local governments. Local governments are encouraged to discuss options with local counsel.