U.S. states lease major toll roads to private companies

A number of U.S. states have proposed leasing major toll roads to private companies. By doing so, they can raise billions of dollars the government can't, helping make road improvements and easing the growing problem of congestion on America's highways, says USA Today.

Some examples:

The Indiana Toll Road was leased for $3.8 billion – more than anyone expected – to privatise it for 75 years. The state also wants to finance construction of a new portion of Interstate 69 south from Indianapolis by offering it for lease when finished.

Texas plans to raise $7.2 billion from a lease, which is just the first part of an ambitious plan to sink $180 billion into road and rail projects that otherwise would be politically unthinkable.

Similar proposals involving new or existing highways are sprouting up from New Jersey to California. They have many selling points, says USA Today:

They raise enormous amounts of money, making up for tax increases politicians won't impose.

They reduce congestion. The higher tolls that private companies will charge in return for their big payments inevitably will be unpopular. But unless the laws of supply and demand are applied to road capacity, drivers will pay in the form of lost productivity while waiting in traffic.

By leasing toll roads, states can raise the funds they need and ensure that roads are for transportation, not vehicle storage, says USA Today.

Source: Editorial, A good way to beat traffic: Lease major toll roads, USA Today, July 5, 2006

For text: http://www.usatoday.com/news/opinion/editorials/2006-07-04-our-toll-roads_x.htm

For more on State and Local Issues: http://www.ncpa.org/pd/state/state.html

FMF Policy Bulletin/ 11 July 2006