NEWS RELEASE from the Commonwealth Foundation
Lease of Turnpike Offers Opportunity for Pennsylvania Transportation Needs
Commonwealth Foundation applauds Governor Rendell's pursuit of Public-Private Partnerships
Harrisburg, PA - Governor Rendell's announcement Wednesday that the state is seeking "expressions of interest" for the potential leasing of the Pennsylvania Turnpike is an important first step towards solving the Commonwealth's transportation funding needs without raising taxes or fees.
The Pennsylvania Transportation Funding and Reform Commission's report highlighted the need for an additional $1.7 billion in annual state transportation spending to repair declining highways and bridges, as well as further subsidize Pennsylvania's mass transit systems. One of the alternatives to raising gas taxes, income taxes, or hiking fees is the use of Public-Private Partnerships (P3s).
While Public-Private Partnerships are a relatively new concept to Pennsylvania, the number of P3s in other states is growing. There is also substantial international experience with transportation P3s which demonstrate their potential for success. Public-Private Partnerships include contracting the management of services; construction and operation of new roads, bridges, and highway lanes; and-as the Governor's announcement suggests-leasing of existing assets like the Turnpike.
Preliminary estimates suggest that a long-term lease (75-99 years) of the Pennsylvania Turnpike could yield between $2 billion and $30 billion in a one-time, upfront payment. Such a sum could be deposited in an interest-bearing account and used to support other transportation needs. Recent models for this include the $1.8 billion lease of the Chicago Skyway and the $3.85 billion lease of the Indiana Toll Road.
"We applaud Governor Rendell's consideration of public-private partnerships," said Matthew Brouillette, president of the Commonwealth Foundation. "Done right, public-private partnerships offer lawmakers an alternative to increasing gas taxes, sales taxes, income taxes, or realty taxes to pay for Pennsylvania's transportation infrastructure and service needs. Policymakers must look to public-private partnerships in transportation first, before considering another tax or fee increase."
In November, the Commonwealth Foundation hosted a forum on transportation funding in Pennsylvania featuring House Transportation Committee Chairman Rick Geist (R-Altoona) and Director of Government Reform Geoff Segal of the Los Angeles-based Reason Foundation. The discussion focused on how Public-Private Partnerships (P3s) can leverage private capital for transportation infrastructure and service needs while reducing the need to raise taxes and fees.
Geoff Segal, who has served as an advisor to Florida Governor Jeb Bush and Indiana Governor Mitch Daniels's efforts to streamline and improve government services, presented an overview of P3s and gave examples of successful implementation in the U.S. and around the world.
"Public-private partnerships are being utilized by governments everywhere as a means to meet the growing transportation demands," Segal said. "Pennsylvania lawmakers are not limited to raising taxes or fees to pay for the Commonwealth's transportation needs. By partnering with the private sector to manage existing assets such as the Turnpike and mass transit agencies or build and maintain current highways and bridges, policymakers are no longer forced into the choice of which tax or fee to increase."
Segal described successful public-private partnerships in both road construction and in leasing of existing toll ways, including the Chicago Skyway and Indiana Toll Road. Segal's presentation can be downloaded here (3MB pdf) or at www.CommonwealthFoundation.org.
House Transportation Committee Chairman Rick Geist spoke on the opportunities for public-private partnerships in Pennsylvania. "No one wants a gas tax increase," said Geist, "but P3s offer an alternative funding source. The most obvious example of a P3 opportunity in the immediate future is a lease of the Pennsylvania Turnpike."
The Commonwealth Foundation looks forward to work with Governor Rendell and lawmakers on how best to advance public-private partnerships in Pennsylvania. In early 2007, the Commonwealth Foundation and the Reason Foundation will jointly issue a policy report on the role P3s can play in helping lawmakers meet Pennsylvania's transportation needs.
The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute located in Harrisburg, PA.
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CONTACT: Matthew J. Brouillette at 717.671.1901
Commonwealth Foundation | 225 State Street, Ste. 302 | Harrisburg | PA | 17101
Friday, December 08, 2006
Commonwealth Foundation on Turnpike
Look close at the center of the photo. I think a new blogger might really enjoy this photo.