Changing the Transportation Paradigm
A brief teaser to some of my comments:
Nearly every function of VDOT has been contracted out by a state -- at a savings of millions of dollars (this has been well documented on this blog and many others). Florida, perhaps, presents the best example for us to follow -- at least 50 percent of every major function (design, right-of-way, maintenance, planning etc) is contracted out at significant savings.
Just a quick point of comparison: FL is able to spend 66.8% of budget on capital 14.5% on maintenance and 3.6% on administration vs. VA’s 42.5, 33.2, and 6.9% respectively --- to be fair, VDOT has consistently jumped in performance rankings each of the last couple of years.
The way we finance roads is changing. Traditional means, federal and gas taxes, are limited and increasingly failing to meet the challenges and needs of commuters. Even traditional tolling, which relies on tax-exempt bonds is falling short. The concession model—using equity, bank debt, and taxable revenue bonds—is quickly becoming the model for getting the roads we need. It’s less risky for start-up toll roads since they’re not entirely funded with debt, but it also opens up a much larger source of funding. There are literally trillions of dollars in pension funds and insurance companies starting to invest in U.S. infrastructure. An explicit policy of utilizing PPPs is a shift toward innovative financing that will deliver the roads Virginians need faster, cheaper, and without new taxes.
Please email me if you're interested in a copy of the powerpoint.