States tap private sector for road funds

• By WILL SENTELL
• Advocate Capitol News Bureau
• Published: Aug 12, 2007 - Page: 9A

• Print
• Email
• Save
• Reprints
• Twitter
• Share

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

When Indiana needed to find money for a long list of crucial highway work, state officials did something unusual.

They leased the state’s 157-mile Indiana Toll Road, in operation for half a century, to a private venture for $3.8 billion for 75 years. The lease created a source of money to build new highways and repair others.

Indiana’s move points up a nationwide trend: Louisiana is hardly alone in its bid to find innovative ways to improve roads and bridges.

“Transportation funding is an issue nationally,” said Matt Sundeen, an analyst for the National Conference of State Legislatures in Denver. “There are lots of states that are really grappling with trying to find some alternatives to the gas tax to solve problems.”

Johnny Bradberry, secretary of the Louisiana Department of Transportation and Development, makes the same point.

“Most states are crying for help,” Bradberry said.

The state gasoline tax in Louisiana is 20 cents per gallon, which road advocates note has not changed since 1989.

The already high price of gasoline has prompted states to look for sources of money that don’t involve raising taxes.

“The trendy issue of the day is looking at public/private partnerships,” Sundeen said.

That is just what Indiana did. In 2005 the state faced a $2.8 billion gap between the cost of the projects it wanted to undertake and the money actually available.

A dozen hearings were held around the state. Officials heard pleas for about 600 projects. State leaders trimmed that list to 200 new construction efforts and 200 projects to preserve roads.

The state then put its toll road out for bid on a 75-year lease. A Spanish-Australian consortium based in Indiana won the lease for $3.8 billion, said Andy Dietrick, communications director for the Indiana Department of Transportation.

The deal means the state can pay for its $2.8 billion wish list, put $500 million in a nearly untouchable fund for future projects and use other money for a wide range of local road work.