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Published on Wednesday, April 9, 2014

What is happening with the Public Works Trust Fund?

Are you confused that the Public Works Board is soliciting applications for Public Works Trust Fund (PWTF) loans after you had heard that the money for the PWTF had been swept by the legislature? Here’s what’s happening:

  •        In 2013 when the legislature adopted a budget for this biennium they swept all of the cash in the Public Works Assistance Account and most, but not all, of the revenue streams.  Loan repayments and a small portion of Real Estate Excise tax revenues are still going into the Public Works Assistance Account.  As a result the Public Works Board was left with not enough money to award loans for 2014 or 2015 but they will have $175 million for the 2016 loan cycle (and very little if any funds available for loans in 2017).  It should be noted that had the legislature not swept the cash and diverted the revenue streams the Public Works Board would have had capacity to award roughly three to four times as much in loans.
  •        The Public Works Board is currently accepting applications for the 2016 loan cycle.  That is the next state fiscal biennium.  In other words they are accepting applications for loans that will be subject to budget decisions made by the legislature next year. 
  •       Those looking to apply for this round of loans will note that the interest rates are higher than they have been historically.  This is also due to action taken by the legislature.  When they passed the capital budget in 2013 it contained a proviso specifying how the Public Works Board is to set the interest rates.  In general, a budget proviso is in effect only as long as single budget cycle so this is not a permanent change to PWTF interest rates.
Given all these changes and future uncertainty we strongly encourage cities to apply for a PWTF loan if you have projects in need of and eligible for funding. Showing strong demand for loans sends a message to the Governor, to the Legislature, and to all others that the Public Works Trust Fund is needed and should be preserved.  Applications for construction loans are due May 16.  A series of loan application workshops are currently being held around the state.  More details about the application process are available here.