During the 2008 session, the state Legislature authorized the West Virginia Department of Transportation to enter into public-private partnerships to build roads.
The most talked-about piece of real estate in Pennsylvania at the moment isn't a pricey vacation home or high-rise office building. It's a stretch of road.
The Pennsylvania Turnpike is for sale. State officials there are hoping to sell the road in a move that could generate billions of dollars for state, money that could be used to pay for other road projects, according to news reports.
The sale of the turnpike is one of the more dramatic examples of a recent trend in many states, including West Virginia. The construction and maintenance of roads, once considered the sole domain of government, is increasingly being turned over to private businesses, either through selling road systems or, more commonly, through entering into public-private partnerships with businesses that put up the money to build new roads, taking the burden off taxpayers.
Unlike in Pennsylvania, there are no plans to sell the West Virginia Turnpike. When asked about that possibility, Lara Ramsburg, spokeswoman for Gov. Joe Manchin, answered with a straightforward "No." However, during the 2008 session, the state Legislature authorized the West Virginia Department of Transportation to enter into public-private partnerships to build roads. Already the agency is considering pursuing such an arrangement to build a 13-mile stretch of highway in Mason and Putnam counties.
Gregory Barr, general manager of the West Virginia Parkways Authority, said he could understand the interest in such an arrangement, pointing out that the funding for building new highways has traditionally come from fuel taxes.
"How can you raise gas taxes when gas is $3.60 and going toward $4 (a gallon)?" he said.
Building new roads in West Virginia is more expensive than most other states, thanks to the state's mountainous terrain and seasonal weather. A four-lane highway can cost as much as $13 million a mile to build in the state.
One solution is to let private companies pay for road construction and then let them profit from their investments by charging tolls or through some other means. Such public-private partnerships are championed by the Reason Foundation, a Washington, D.C., libertarian think tank, which, in a 2007 paper, pointed to government figures showing that the annual capital investment in highways is $68 billion billions less than what is needed to maintain bridges and roads.
On top of that, another $51 billion would be needed just to keep up with increasing traffic demand, the authors wrote.
"The existing state and federal fuel tax and highway trust fund system is unable to meet these investment needs," the authors wrote. "Neither Congress nor most state legislatures have increased fuel taxes to levels that would even offset increases in fuel efficiency and inflation, let alone funding needed road maintenance and increased travel demand. So increasingly, states are turning to toll finance and (public-private partnerships) to begin to fill the funding gap."
Among the states that have turned to privatization in recent years is Indiana, which in 2006 turned over operations of the Indiana Toll Road to a joint venture between two foreign firms. Another is California, which recently opened state Route 125, a 10-mile toll road built under a public-private partnership.
Such arrangements have their critics. The Pennsylvania Public Interest Research Group has voiced concerns about the sale of the Pennsylvania Turnpike, saying that any lease should maximize the public benefit of the road. The organization said public transit would be a much better investment in public dollars, since transit would cut back on the number of vehicles on roads, saving gas and drawing down demand.
In recent months, many state road workers have expressed fears that their jobs would be privatized, something that state transportation road officials have adamantly denied. There are currently no plans to enter into any type of public-private partnerships to help the West Virginia Turnpike deal with its maintenance issues, Barr said.
However, WVDOT officials are considering the possibility of entering into a public-private partnership to help pay the cost of expanding 13 miles of U.S. 35 into a four-lane expressway in Mason and Putnam counties. The cost of the project is expected to run from $300 million to $325 million.
WVDOT is drafting a request for quotation that would invite companies to bid on the project, but there hasn't been any decisions whether a public-private partnership is the route the agency wants to pursue, said Jim Sothen, deputy state highway engineer of development.
Entering into such an agreement does raise the possibility of the 13-mile stretch becoming a toll road, although that doesn't necessarily have to be the outcome. WVDOT sees the new law passed by the Legislature as giving it one more tool to use when deciding how to pay for road construction.
"It is basically trying to bring money to the table to build the roads now, but somewhere you would have to have the money to pay the money back," Sothen said.
