Faced with an annual $8.1 billion funding gap for its interstate system, Pennsylvania transportation officials are proposing replacing critical, aging bridges with toll bridges.
The proposal is part of a search for additional, alternative funding as the state faces dwindling gas-tax revenues, less federal funding than expected and interstate bridges that are nearing the end of their useful lives. The Pennsylvania Department of Transportation receives $6.9 billion a year in funding and estimates it has $15 billion in needs for the interstates for the 2020-2021 fiscal year.
The plan, as proposed by PennDOT, would target five to 10 major interstate bridges in need of replacement. Implementing the plan would involve developing a public-private partnership in which the private entity would take on not just the bridges’ design and construction but also their financing, operations and maintenance for 30 years.
Such partnerships – called design-build-finance-operate-maintain, or DBFOM, concessions – are becoming more prevalent across the country as cash-strapped states seek innovative alternatives to the gas tax. The partnerships have the advantage of allowing DOTs to start major projects more quickly, while spreading out funding over a longer period of time. The proposed PennDOT partnerships would leverage future revenues to issue bonds to pay for design, construction and other costs, with payments being made by the state to the private entity over the length of the 30-year contract.
“It is our desire to set realistic, affordable toll rates to generate the revenue to pay back the capital costs in a 30-year maintenance period,” said Kenneth McClain, director of PennDOT’s Alternative Funding Program, during a recent virtual presentation to the Associated Pennsylvania Constructors. “It helps us to deliver these projects now.”
But the mention of the word “toll” is already hitting opposition.
“When I say the trucking business cannot afford tolling, it is not about being greedy or increasing profits, it is about maintaining the little profit we have and survival,” said Joseph A. Butzer, interim president of the Pennsylvania Motor Truck Association, during a recent hearing before the state Senate’s transportation committee.
