Virginia Shouldn’t Restrict Its Public-Private Transportation Act

Remarks at the Thomas Jefferson Institute Transportation Roundtable

Since 2007, CNBC has evaluated each of the 50 states to identify the best places to do business in the United States. This year CNBC announced that Virginia had fallen from its position as the number one state in the country down to number three. It doesn’t sound too bad, but Virginia had never previously ranked lower than number two in this survey.

CNBC attributed Virginia’s fall in large part to its transportation system: “Infrastructure-specifically the state’s perpetually clogged highways-has long been an issue in fast-growing Virginia, and there is fresh evidence this year that the state is having trouble keeping pace. With some of the country’s toughest commutes, the state dipped to number 33 in the category, down from 10th a year ago.”

That third-place ranking may look good in a few years if some politicians get their way. There are currently misguided calls to put dramatic restrictions on Virginia’s Public Private Transportation Act (PPTA) of 1995, which played a crucial role in building new infrastructure by allowing private companies to “enter into agreements to construct, improve, maintain and operate transportation facilities.”

Since 2002 Virginia has had to divert more than $3 billion from its highway construction program to meet basic road maintenance needs. The PPTA has picked up the slack and enabled the design and construction of three major transportation projects: the I-495 Express Lanes in Northern Virginia, the Midtown Tunnel-Downtown Tunnel-MLK Expressway extension project in Hampton Roads, and the I-95 Express Lanes project that begins just north of Fredericksburg.

These three projects are valued at more than $5 billion but required only about $900 million of state funding. The $4.1 billion balance came from the state’s private sector partners under PPTA agreements. Without the PPTA, these three projects would have been delayed for years or never completed at all. And the substantial boost these projects provided to Virginia’s economy during the recession would have been lost.

The 495 Express Lanes PPTA project was completed last month-ahead of schedule and on budget. This $2 billion dollar project increased traffic capacity by 50 percent on 14 miles of the Capital Beltway, one of the nation’s busiest highways, with a state investment of only about $400 million. The project replaced more than 50 aging bridges, rebuilt 12 major interchanges and brought Express Lanes to the Beltway.

The I-95 Express Lanes project, which began construction in July of this year, is a $1 billion PPTA project requiring only about $70 million in state funding. The $2.1 billion Downtown Midtown Tunnel PPTA project, which started construction in June, will only cost the state $421 million.

To pay for these projects without the private sector’s funding, Virginia would have needed to raise the gas tax by 10 cents per gallon and dedicate 100 percent of that tax revenue towards the three projects for 10 years.

So why would the state cripple its ability to partner with the private sector now? Virginia legislators should resist the proposed changes to the PPTA and preserve Virginia’s status as a national transportation leader in public-private partnerships.

Shirley Ybarra is senior transportation policy analyst at Reason Foundation and served as Virginia’s secretary of transportation from 1998 to 2002.