Having found little success with innovative revenue-generating approaches, Va. Gov. Bob McDonnell (R) is turning to more conventional methods to achieve his goal of adding nearly $4 billion to the Commonwealth’s transportation coffers by the time he leaves office in 2014.

Speaking at the Governor’s Transportation Conference in Roanoke, McDonnell proposed issuing $2.9 billion worth of bonds over the next three years, $1.8 billion of which will be funded entirely by the Commonwealth. The remaining $1.1 billion will be sold as GARVEE bonds and repaid out of Virginia’s future federal transportation funding allocations.

Also in McDonnel’s plan is a new a state infrastructure bank for regional transportation projects to be funded by approximately $250 million in existing unspent funds identified in a recent audit of the Virginia Department of Transportation (VDOT), and $150 million from the state’s FY 2010 budget surplus.

Though some have criticized the heavy reliance on debt financing, McDonnell counters that the current nadir in both interest rates and construction costs makes the current environment ideal for maximizing the return on borrowed money. The state’s Transportation Secretary Sean Connaughton has said that there’s enough room in Virginia’s current borrowing limits for both McDonnell’s plan and other capital spending needs.

Certainly, the bond concept offers more certainty than McDonnell’s earlier cash creation ideas. His proposal to channel income from offshore oil and gas leases to the transportation budget was sunk with the extension of federal bans on new Atlantic Coast drilling through 2017.

McDonnell has also backed off his idea of cashing in on proceeds from the sale of state-run liquor stores amid criticism that the plan would cost the state more than $40 million in annual revenue. However, the governor has promised to introduce a revised liquor store privatization plan when the General Assembly returns to work in January.

Nowhere is there any mention of increasing the state’s 17.5-cent/gallon gas tax for the first time since 1986. Given the state of the economy and Virginia’s anti-tax leanings, any move to do so would likely be a symbolic gesture and make little headway in the state’s divided legislature.

The same fate may await another element of McDonnell’s plan—an amendment to the state constitutional amendment safeguarding designated transportation funds from being redirected to the General Fund. This budget-balancing tactic has been used by McDonnell and his predecessors with other funding pots.

Having any measure of funding security would be welcome news to VDOT, which as had more than $4.2 billion shaved from its six-year project funding plan over the past two years, along with 7,500 jobs. McDonnell plans to detail specific projects to be funded under his plan in January.