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Transportation Funding: What is a Public-Private Partnership?

When it comes to transportation infrastructure, a public-private partnership uses private investment to connect innovative technology and traffic management solutions, like optional or express toll lanes, with governments to help them efficiently and effectively address our roadway challenges.

Why Public-Private Partnerships?

  • More can be done with less funding. P3s allow limited state dollars to be stretched to fund additional projects across the state. Rural areas could benefit from added funding for transportation improvements if private investment is utilized in urban areas where congestion is greatest.
  • Roadways can be designed and built years sooner at little to zero cost to the taxpayer. The private sector can pay for the full lifecycle of the roadway project from construction to operation and maintenance costs.
  • Taxpayers have flexibility and choice in their daily commute. The same number of free lanes exists before and after the project is completed; and toll lanes will always be optional for motorists.
  • The state maintains ownership and oversight. With public-private partnerships, the state and taxpayers are protected from risk. The private sector is responsible for debt incurred developing the roadway, and the state always retains ownership of the roadway.

What Are They Saying?

Groups on all sides of the political spectrum see value in P3s.

  • National Conference of State Legislatures: “Key benefits of the P3 project delivery method arise from the leveraging of the private sector’s expertise and resources. Private sector partners can bring to the table tools to achieve efficiencies, provide financing and enhance quality.”
  • Brookings: “One of the most promising innovations to emerge over the past decade is greater use of public-private partnerships (P3s) to complement traditional funding. When designed well, collaborating with the private sector can attract greater net investment, unlock new management efficiencies, and strike an ideal balance between protecting the public interest and generating private return on investment.”
  • Bipartisan Policy Center: “We have an extraordinary opportunity in America — to confront the pressure being placed on our nation’s roads, water systems, ports, and airports with available private capital….Wise infrastructure investments would create millions of jobs, maintain the health, safety, and security of our communities, and set our nation on track for decades of greater prosperity.”
  • Reason Foundation: “Because these long-term P3s are financed based on future revenues over a long period (typically 30-to-50 years), critical major infrastructure projects can be financed now and construction can begin much earlier than under normal cash-based project funding.”
  • CATO Institute: “Public‐ private partnerships can impose commercial discipline into construction and maintenance of infrastructure, leading to timelier and less‐ costly delivery. P3s of this kind can deliver road infrastructure on time and within budget.”