Alabama is getting $125 million from the federal government to help build a new bridge and expanded Bayway between Mobile and Baldwin County, but that money won’t do much to alleviate the need for tolls.
The award is the biggest of 20 Infrastructure for Rebuilding America grants formally announced Thursday by U.S. Transportation Secretary Elaine Chao. She said the federal government received nearly 200 applications totaling $9.8 billion and approved about $856 million.
“This $125 million is really gonna help jump-start this project,” Federal Highway Administrator Nicole Nason said in an interview. “So, it’s a big announcement today and a big win for the community.”
Alabama Gov. Kay Ivey praised the grant, along with a $6.87 million grant for a project in Tuscaloosa.
Some truck drivers are now weighting in and how a $24 toll each way could hurt their business.
“I am proud to support the Trump Administration in their endeavor to not only make band-aid fixes, but to make substantial, long-term improvements to infrastructure,” she said in a statement.
But it $125 million INFRA grant for the Mobile project amounts to less than 6 percent of the projected cost of the $2.1 billion project that includes a new six-lane bridge and an elevated Bayway with four lanes in each direction.
Alabama Department of Transportation officials say they can’t fund the project without tolls.
The funding sources break down like this. About 18 percent of the money will come from tax-exempt private activity bonds, which governments issue for the benefit of private companies, like the one that will be put in charge of building the project.
Another 33 percent will come from a federally back loan under the Transportation Infrastructure Finance and Innovation Act, or TIFIA.
That leaves 49 percent of the cost to be made up from other sources. The state plans to put up hundreds of millions of dollars through a combination of tax funds and borrowing.
A large chunk of the remaining portion will come from the private consortium of companies that the state plans to select by the end of the year. That’s where the tolls come in. Charging motorists up to $6 for a one-way trip across the entire 10-mile route allows that private group to recoup its investment, earn a profit and maintain the system for 55 years.
The INFRA grant announced this week will make up a small slice of the money ALDOT will have to come up with, according to project manager Edwin Perry.
“This grant would help reduce the public subsidy from ALDOT, allowing for the possibility to buy down a little bit on the tolling amount,” he told reporters last week. “But it will not eliminate the need for tolling.”
This was the third time Alabama has applied for an INFRA grant. The feds rejected a request for a $500 million grant and also turned down an application for a $250 million grant.
Federal law generally prohibits tolling interstate highway, but the U.S. Department of Transportation approved the state’s request for tolling back in 2017 under an exception based on relieving congestion.
“Tolling is always one tool in the toolbox,” Nason said. “And since this is a new, six-lane cable-stayed bridge with new clearance to carry I-10 across the Mobile River Channel, this doesn’t violate any federal laws.”