New Public-Private Partnerships for Infrastructure Bill Now Law in Maryland; More State Updates on P3s & Tolling

Maryland Gov. Martin O’Malley this week signed into law a House bill that revises guidelines for infrastructure public-private partnerships (P3s). I also have updates on P3, toll and other projects and policies in eight other states, a look at some recent reports and writings on those topics, and some information about how state government officials can learn more on these topics at an important forum this summer.

Maryland’s New P3 Law

The new P3 law in Maryland, HB560, gives the state Board of Public Works (a three-member panel made up of the governor, comptroller and treasurer) a more prominent role in the public-private partnership process and seeks to encourage innovation by allowing businesses to pitch ideas for P3 projects without following the usual procurement procedure. MarylandReporter.com’s Becca Haller writes that the legislation drew opposition from some lawmakers who worried it would eliminate too many protections and undermine the integrity of the procurement process. But Lt. Gov. Anthony Brown, who championed the bill for the O’Malley administration, countered that the new law will actually expand accountability and transparency and improve relationships between the private sector and the Board of Public Works. Maryland’s revised P3 law has long been in the works. A similar measure was derailed last year because of a lawsuit involving a project in Baltimore (as detailed in my 2012 Capitol Research brief on “Transportation Funding Commissions” and in an April 2012 blog post).

Other State Updates

  • Florida: The Florida Metropolitan Planning Organization Advisory Council (MPOAC) is suggesting that the Sunshine State begin transitioning to a system that requires people to pay for the miles they drive, The Sun Sentinel reported recently. Some see the mileage fee as a foregone conclusion and believe the growing use of express toll lanes and all-electronic tolling in the state will serve as a stepping stone. The MPOAC Revenue Study that recommends a study of vehicle miles traveled charges can be found here. … Transportation planners in the Tampa area are studying the idea of adding bus toll lanes along several routes, The Tampa Tribune reported. South Florida and Orlando are trying something similar.
  • Indiana: A businessman and Clarksville town councilman says Indiana should pay for a $560 million shortfall in Kentucky’s portion of the Ohio River Bridges Project in order to avoid tolls that could have a negative impact on southern Indiana businesses, The News and Tribune reported recently.
  • Kansas: The legislature last week gave final approval to legislation to partially merge the Kansas Turnpike Authority into the Kansas Department of Transportation and make the KDOT secretary the turnpike’s director of operations, The Wichita Eagle reported. Tollroadsnews calls the whole arrangement “a bizarre move.”
  • Louisiana: The House Transportation Committee has approved a bill that would allow businesses to sponsor state-owned assets, such as ferries and rest stops, The Times-Picayune reported. Under House Bill 386, the state Department of Transportation and Development would be able to regulate and charge fees for sponsorship signs on state-owned property and keep 100 percent of the proceeds. States like Ohio and Virginia have had similar programs to bring in additional transportation funds.
  • North Carolina: Transportation Secretary Tony Tata told legislative leaders recently that his agency backs legislation to eliminate a mandate on transportation officials to build toll-road projects in Gaston County, the northern Outer Banks and near Wilmington, the Associated Press reported. Tata said all projects should compete for funding through the state’s data-driven prioritization process.
  • Ohio: The Ohio Department of Transportation is cancelling plans for a new toll road that have been on the books for more than 30 years. A study found that even if they were four times as high as on the Ohio Turnpike, tolls on the proposed extension of Route 30 to West Virginia would only bring in less than $500 million over 20 years, well short of the $900 million needed to finance the project. Ohio officials say they are open to considering local and private funding for the project.
  • Virginia: Following an 18-month review of port operations, the Virginia Port Authority’s board of commissioners recently decided to turn down two private bids to buy the leases on the ports’ container terminals and instead restructure operations and overhaul the port’s long-term strategy, The Journal of Commerce reported. Efforts to privatize port operations faced widespread opposition from many with port-related jobs who worried that private operators would look out for their own interests over those of the people of Virginia and unfairly discriminate against competitors, The Richmond Times Dispatch reported. Gov. Bob McDonnell and Transportation Secretary Sean Connaughton are said to be reviewing the board’s decision. Fitch Ratings said last week the decision to discontinue negotiations with potential lessors may create negative momentum for other large port privatization projects. … Liz Essley of The Washington Examiner reported recently that Northern Virginia leaders are considering options to relieve traffic on the notoriously congested I-66. Installing express lanes, as on the Capital Beltway, and a potential extension of Metrorail to Centreville are reportedly under consideration. … Speaking of the Capital Beltway, the operators of the 495 Express Lanes let all motorists ride free last weekend, Transportation Nation reported. Transurban, which put up the $1.5 billion to build the lanes, has had difficulty attracting motorists to use the tolled lanes.
  • West Virginia: Legislation to eventually remove tolls on the West Virginia Turnpike passed the House of Delegates last week, reports TruckingInfo.com. Gov. Earl Ray Tomblin is said to have “strong reservations” about the plan to remove tolls along the 88-mile route once the bonds used to build and improve it are paid off by February 2020. The Charleston Daily Mail had more on the measure and the governor’s opposition.

Additional Reading

  • The Urban Land Institute (ULI) has a new report called “When the Road Price is Right: Land Use, Tolls, and Congestion Pricing.” It’s highlighted by case studies of tolling in Florida, Texas, California, Colorado and Maryland that, as the Executive Summary puts it, “illustrate the different policy options for managing travel reliability, traffic volume, travel speeds, and revenue targets and for integrating tolling and transit service. They also explore how these new tolled facilities are being coordinated with land use and development.”  
  • The Center for American Progress issued a recent report on “Using Pension Funds to Build Infrastructure and Put Americans to Work.”
  • Two executives from Highstar Capital penned an op-ed for Politico last month that spells out “The case for private-public partnerships.” Christopher Lee and Sean Medcalf write that “It’s time for Congress and the administration to catch up with the states and pass legislation which will accelerate private sector investment in revitalizing our transportation infrastructure and jump starting our sluggish economy.” Lee and Medcalf believe a national infrastructure bank could attract such investment at a rate of at least three to one for every federal dollar invested.
  • Patrick D. Jones, Executive Director/CEO of the International Bridge, Tunnel and Turnpike Association, writes in a recent blog post about “What States Can Teach Us About Tolling.” “By taking a more permissive approach to highway tolling—not as a mandate but as one tool in a wider toolbox of transportation funding options—Congress can give its blessing to a trend that has already taken root in 34 states,” he writes. Jones highlights the IBTTA’s recently launched Moving America Forward campaign to highlight the benefits of tolling. “With limited funding options at the federal level, states should have the flexibility to reach into the wider toolbox of funding and financing strategies and pick the mix of options that works best for them.”
  • The Portland (ME) Press Herald recently editorialized in favor of toll roads for Maine: “Clearly, tolling is in our future, and it should be in the near future. A toll is a user fee. Only people who drive the road are asked to make a contribution. Those who drive more miles are asked to pay more. The same is true for drivers of heavy trucks, which put more wear and tear on the infrastructure.” Legislation offered by Rep. Brian Bolduc would create a task force to study charging tolls on portions of Maine’s interstates to fund highway improvements. Currently federal law says that no state can charge a toll on a road built or improved with federal money. “Congress and the Legislature should be taking serious steps toward moving us over to a toll road system, and they should be doing it soon,” the editorial argues.

InfraAmericas U.S. P3 Infrastructure Forum 2013

State government officials have an important opportunity this summer to learn more about the state of public-private partnerships and make connections in the industry that could pay dividends down the road. The InfraAmericas U.S. P3 Infrastructure Forum is scheduled for June 18-19 at the Crowne Plaza in New York City. For the third year in a row, CSG is a supporting organization for the conference, which brings together state and federal transportation policy makers and P3 industry executives from the private sector, U.S. pension plans and the capital markets. Florida, Indiana, Maryland, Ohio and Virginia are among the states scheduled to be highlighted during the conference. Among the confirmed speakers are Indiana’s Public Finance Director Kendra York, Maryland Lt. Gov. Anthony Brown, Virginia Office of Transportation P3s Tony Kinn, Texas Department of Transportation CFO James Bass, and Ohio Deputy Director of Innovative Delivery James Riley. You can find out more about the event and get signed up to attend here. The conference is well worth making time for in your busy summer meeting schedule. You can also read my coverage of last year’s conference here