Commentary

Innovators in Action (July 2015 edition): Taking on Infrastructure, Pension Challenges in Georgia

The latest interview in Reason Foundation’s Innovators in Action 2015 series focuses on Georgia’s recently enacted Senate Bill 59—the Partnership for Public Facilities and Infrastructure Act—which enables the state and local governments to use public-private partnerships (PPPs) for the private financing and development of “social infrastructure,” such as higher education facilities, schools, public health facilities and other public buildings. The passage of SB 59—the culmination of over two years of work to advance the concept by the bill’s sponsor, State Senator Hunter Hill—places Georgia among the early leaders in providing a statewide legal framework for social infrastructure PPPs, alongside pioneers like Virginia, Texas and Florida. At the same time, Sen. Hill sponsored legislation to transition the state teachers’ pension system from a traditional defined-benefit pension plan to a hybrid defined-benefit/defined-contribution plan that would have lowered financial risks to the state and provided a more equitable retirement system for teachers of all experience levels.

I recently interviewed Sen. Hill on his social infrastructure PPP legislation, the need to reform the state teachers’ pension system, and more.

Here’s an excerpt:

Leonard Gilroy, Reason Foundation: During the last two legislative sessions you proposed enabling legislation to allow for public-private partnerships (PPPs) in the development of “social infrastructure,” meaning a broad array of government buildings. That legislation was ultimately enacted this year. What prompted your interest in social infrastructure PPPs?

Georgia State Senator Hunter Hill: The issue came to my attention once I got into government as I learned about how constrained our budgets are at the state level and the local level for providing facilities that the public needs. As costs have increased in health care and other human services, infrastructure dollars have really taken a downturn in terms of their prevalence within the budget. It just seemed to me that we should leverage the capital, innovation and expertise of the private sector in delivering government facilities. PPPs help the taxpayer get a better value, and they help the public side get a better understanding of how to deliver projects to meet a public need.

Gilroy: Are there particular needs on the social infrastructure front in Georgia that helped drive this legislation forward?

Hill: No, it wasn’t any one specific need. Rather, it was something I think we need to address now for the future. I think the law gives the appropriate flexibility for state and local governments to be able to address the needs that they may have now or face in the future, but it’s also constrained enough that it keeps us fiscally responsible and protects the public from any downsides or bad ideas.

Check out the full interview here. Other articles featured in the Innovators in Action 2015 series are available here.

Leonard Gilroy is vice president of government reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He also serves as senior managing director of the Pension Integrity Project at Reason Foundation, which assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.