Debt Financing

MAP-21, the federal surface transportation authorization bill Congress passed this summer, doesn’t even officially take effect until next month. But a few folks on Capitol Hill are already reportedly talking about what happens when it expires in 2014. Could mileage-based user fees factor into the next authorization and achieving a more sustainable revenue model? And what role are gas taxes, tolling and other revenue mechanisms likely to play at the state and federal levels down the road? Here are a few recent updates.

Transportation advocates are pondering what the future may hold for metro Atlanta and other parts of Georgia after voters in nine of 12 regions last week rejected a local option sales tax to fund regionally selected transportation projects. Among the questions to emerge after the vote: Is Atlanta’s notorious traffic congestion about to get much worse? Will voting down the tax hike actually end up still costing Atlanta area residents more? Could the city’s credit rating be affected? What impact will it have on the region’s economic development efforts? What’s ahead for major transportation projects in the region? What are the other options for finding transportation revenues? And was the vote in Atlanta a bellwether for the rest of the country on transportation funding? Here’s a week’s worth of analysis of what it all means from a variety of perspectives.

The Council of State Governments hosted the 2012 CSG Transportation Policy Academy June 26-28 in Washington, DC just as Congressional negotiators were reaching final agreement on a new federal surface transportation bill. Eight state legislators from seven states and representing all four of CSG’s regions attended the academy. The group included five legislators who chair transportation committees in their respective states. The policy academy agenda included visits to Capitol Hill and the U.S. Department of Transportation, a bus tour of regional transportation construction projects hosted by the Virginia Department of Transportation and briefings on such topics as the state of the nation’s infrastructure, the importance of infrastructure investment to the economy, the future of the federal-state partnership in transportation and innovative transportation financing options for states including public-private partnerships and state infrastructure banks. Here are some highlights of remarks by policy academy briefers and links to resources where you can learn more.

On July 5^th, Pennsylvania Gov. Tom Corbett signed legislation (House Bill 3) to allow the state to enter into public-private partnerships (P3s for short) to finance transportation projects. As a result, Pennsylvania became the 33^rd state to adopt such legislation. The 32 other states they join all have their own stories to tell about their experiences and justifications for employing the financing tool, as I was again reminded last month at the annual InfraAmericas U.S. P3 Infrastructure Forum in New York City.

Virginia Gov. Bob McDonnell this week unveiled a pipeline of transportation projects that could be candidates for public-private partnerships (P3s). Meanwhile, Ohio will look to private contractors to take over maintenance on two of that state’s major Interstates. Also, Wyoming’s department of transportation moves forward with a plan to forego expensive construction projects for the time being in favor of pavement preservation work just as a legislative “super-committee” gears up to begin work on a plan to fund the state’s highway maintenance and construction going forward. Plus, there are items this week on efforts to overcome privacy concerns about mileage-based road fees as well as Oklahoma’s bridge repair plans.

In a recent Capitol Research policy brief, we focused on “Transportation Funding Commissions” empaneled in four states last year to come up with solutions to significant infrastructure funding shortfalls. I have updates on three of those states below along with an item on another state that is just beginning such a process. Plus, an update on Oregon’s continuing quest to come up with a viable vehicle miles traveled fee system and links to other recent news of note and key transportation reports.

Next month in New York City, InfraAmericas will host its eighth annual infrastructure forum on public-private partnerships (P3s). CSG is a supporting organization for the forum, which brings together state, federal and local policymakers and transportation officials, private sector developers, investors and others for two days of panels focused on the latest trends and projects in the P3 universe and what the future may hold for P3 deals. InfraAmericas wants more state government officials to attend and from what I’ve heard, there remains a great interest in state capitals with regards to how P3s can be used to finance transportation projects. That’s why CSG became involved with InfraAmericas in supporting the conference. Before I head up to the Big Apple (and hopefully some of you do to), I thought it would be a good time to catch up on some recent news and resources in the world of P3s and tolling. Below are some updates on P3 projects in several states as well as a look at how the federal authorization debate could shape how states make use of P3s and tolling in the future. But first I have more information about the InfraAmericas conference agenda and how you can register to attend.