Citation

Brock E. Am. City Cty. 2007; 122(9): 26-31.

Copyright

(Copyright © 2007, Penton Media)

DOI

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PMID

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Abstract

This article discusses the latest trend local and state governments are using to tackle paying for road construction: forming public-private partnerships (PPPs) that develop toll roads as an initial funding source. Many states see such alternative funding as necessary in the wake of declining public funding. Essentially, a state uses a PPP as leverage to induce a company to initially fund the cost of a road construction project. Once completed, toll money is used to repay the initial capital outlay. Beyond initial construction costs, the PPP approach is also being used to pay for road maintenance, especially as increased traffic has contributed to increased maintenance needs. According to the August 2006 Federal Highway Administration (FHA) study, "Current Toll Road Activity in the U.S.: A Survey and Analysis," 21 states have used PPP funding methods to implement their transportation projects. The article discusses in detail PPP use in two states: Georgia and Indiana. Transportation projects in Texas are also discussed, though from the aspect of state opposition to PPP funding. In May 2007, the Texas legislature issued "a moratorium on comprehensive development agreements (CDA)," a contract type used within PPPs. The moratorium addresses in part the particular concerns of Texas farmers and ranchers over the amount of arable land proposed for toll roads. Yet, despite Texas legislature opposition to PPP use, the article quotes Texas state officials who predict an increased popularity for toll roads within the state in the absence of other available funding sources to build major highways today.