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Task force considering new revenue models for transportation infrastructure

Task force considering new revenue models for transportation infrastructure

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SALT LAKE CITY — Utah lawmakers are trying to account for potential public-private partnerships and new energy-efficient vehicles as they plan for the state's future transportation infrastructure and maintenance needs.

The state Legislature's Transportation Governance and Funding Task Force met recently to consider recommendations for moving toward a system that leases public infrastructure assets to private companies.

The task force has been working since May to find funding options for Utah's developing infrastructure.

Marc Scribner, a senior fellow with the Competitive Enterprise Institute, told state lawmakers about new forms of public-private partnerships being studied in other countries. The institute is a nonprofit libertarian think tank based in Washington, D.C.

Scribner described "asset recycling" as a system where states can sell or lease revenue-generating, publicly owned assets to the private sector, which would then take over the maintenance costs and make payments to the states.

States could then fund other projects that may be less capable of generating their own supporting revenue, he said.

Under such a system, states could create an infrastructure inventory that keeps track of revenue-generating assets such as toll roads and express lanes, Scribner said.

Each roadway would have to be handled differently, he said, noting that limits already exist to prevent interstates without tolls from being turned into toll roads. But existing toll roads would be appropriate to lease.

Even without adopting such a model, states could benefit from taking a closer inventory of their infrastructure to know where future projects will be needed and where private groups could be brought in, Scribner said.


Additionally, public-private partnerships shift the financing risks away from taxpayers and onto private investors, he said.

"It is those investors who take the haircut, not the taxpayers," Scribner said.

Public entities in Canada use "availability payments," he said, where governments maintain a close role with infrastructure but outsource maintenance duties to private companies, Scribner said.

He also explained how revenue collection systems for roads — traditionally reliant on gas tax — likely will become less effective at generating enough funding to keep Utah's roadways in good repair.

"Funding is becoming more challenging. We're seeing vehicles becoming more fuel-efficient, (and) we're eventually going to have an electrified fleet," Scribner said. "That means that the fuel tax revenue that traditionally supports most of these investments is no longer going to be there."

The growing interest in electric and fuel-efficient vehicles creates the need for a "user-based alternative revenue mechanism" to ensure that motorists pay for their proportional use of the roadways, Scribner said.

"There's proportionality," he said. "Users who drive more pay more, and users who impose disproportionate costs such as heavy trucks and maintenance costs can be charged more."

Such a system might also provide more funding predictability from year to year than a traditional fuel-tax system, he said.

It's the working group's viewpoint that the way we fund things today will not continue or cannot continue in the future.

–Sen. Wayne Harper

Sen. Wayne Harper, R-Taylorsville, co-chairman of the task force, said the group is looking at how other states fund and govern their infrastructure and transit models.

"It's the working group's viewpoint that the way we fund things today will not continue or cannot continue in the future," Harper said.

"Value capture" models, such as the transportation reinvestment zones used in Texas, are set in developing areas where property values are expected to increase, he said. Those expected property value increases are collected, often through a limited-term toll road, and then are used to fund further development.

"It's a tax increment zone specific to transportation," said Julie DeHoyos, a financing coordinator with the Texas Department of Transportation.

DeHoyos said such a system essentially creates a savings account for developing areas where some of the value of their growth is retained by the state as it prepares for the next project.

Harper said the task force already has been considering several new transportation governance models, and lawmakers plan to continue that work when they meet Wednesday.

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Ryan Morgan


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