The Growing Importance of Public Private Partnerships in Meeting America’s Transportation Needs AASHTO Executive Director John Horsley Presentation to the ARTBA PPV Conference Washington, DC November 1, 2007

Partnering Organizations Partnering Organizations AASHTOAAA ACECAPTA ARTBAAGC ATAAAR 17 Organizations Jointly Developed and Submitted Vision Report to National Commission 17 Organizations Jointly Developed and Submitted Vision Report to National Commission New Transportation Vision for the 21 st Century May 2007, Cambridge, Maryland

Policy Priorities Increase funding for core highway and transit programs and ensure solvency of Highway Trust Fund Increase funding for core highway and transit programs and ensure solvency of Highway Trust Fund Generate net new funding for strategic national investments from sources outside the Highway Trust Fund Generate net new funding for strategic national investments from sources outside the Highway Trust Fund Critical Commerce Corridors an excellent option to meet this objectiveCritical Commerce Corridors an excellent option to meet this objective

Policy Priorities Preserve the system Preserve the system Aggressively invest in new transit and highway capacity Aggressively invest in new transit and highway capacity All levels of government – federal, state and local – must fund their share of the increase required All levels of government – federal, state and local – must fund their share of the increase required

Federal Highway Program Possible: with 3-Cent Fuels Tax Adjustment in 2009 with Additional 7-Cent Adjustment Through 2015 or Equivalent

All Levels of Government Must Continue to Fund Their Share National Capital Investment in Highways (billions) Funding New TollNet IncreaseRevenue Required IncreaseRevenue Required Needed Needed Federal$43 $73 $30 $30 State/$52 $87 $35 $8 $27 Local Total$95$160 $65 $8$57

Tolling and Public Private Partnerships Playing an Increasing Role Chicago SkywaySR-125 San Diego Indiana TollwayI-95, I-495 Virginia TransTexas CorridorTacoma Narrows Br.

AASHTO’s Policy Position “Every state should be given all options possible in the areas of tolling and public private ventures so those states can determine for themselves what is in the best interests of their citizens.”

Tolling and Public Private Partnerships Playing an Increasing Role Last 10 Years 150 miles per year of new expressways 30%-40% funded by tolls and PPVs Next 10 Years 50% to be funded by tolls and PPVs. Tolls revenues now 5% to grow to 7% of total highway revenues

Backlash Has Set In Congressional concerns Congressional concerns Texas moratorium Texas moratorium PA tolling of I-80 through PA Turnpike Authority PA tolling of I-80 through PA Turnpike Authority New Jersey Governor Corzine: “New Jersey’s roadways not to be sold or leased to a for-profit or foreign operator.” New Jersey Governor Corzine: “New Jersey’s roadways not to be sold or leased to a for-profit or foreign operator.”

Increased Customer Focus Hold down initial tolls to lowest rate possible Hold down initial tolls to lowest rate possible Protect customers from uncontrolled increases in future Protect customers from uncontrolled increases in future “No Compete Clauses” more carefully drafted “No Compete Clauses” more carefully drafted PPVs and State DOT joint ventures share risk/share reward/protect customers PPVs and State DOT joint ventures share risk/share reward/protect customers

Highway Pricing Supported by: Supported by: EconomistsEconomists Transit AdvocatesTransit Advocates Political appointees who will never again have to face the votersPolitical appointees who will never again have to face the voters Political leaders who will have to face the voters will demand: Political leaders who will have to face the voters will demand: Better dealsBetter deals Better protection of the publicBetter protection of the public

PPVs are Vital Public Private Venture financing of highway improvements is vital to meeting national needs Public Private Venture financing of highway improvements is vital to meeting national needs But, at best, it represents 10% of what is needed But, at best, it represents 10% of what is needed Don’t oversell it to the detriment of sustaining Highway Trust Fund solvency Don’t oversell it to the detriment of sustaining Highway Trust Fund solvency

Thank You John Horsley Executive Director AASHTO