As state transportation departments struggle to keep our country’s infrastructure maintained and budgets keep shrinking, many states have turned to new tolls, taxes, and more inventive ways to keep themselves afloat. One hot button issue is the public-private partnerships (P3 deals) that see private firms investing in public transportation projects in exchange for the right to collect tolls on the road they fund.
According to an industry forecast report by Fitch Ratings, states will likely continue to increase tolls and taxes and enter into programs like P3 deals in order to make ends meet until their budgets can be revitalized.
“We’re already seeing states raising fees of all kinds on transportation users and we expect to see more of that over the next year,” said Eric Kim, Fitch’s director of public finance in an interview with Fleet Owner. “We don’t have specific prospects for what kinds of fees exactly, but state governments are certainly moving in that direction.”
Even though there is no solid data that Kim can point to, he says that Fitch expects that P3 deals will become increasingly popular. Kim pointed out that “Two-thirds of states currently have P3 enabling legislation in place, and given the size of future capital needs, Fitch expects transportation P3s to continue to rise in 2014.”
It’s not only existing toll roads that may be seeing fare hikes. According to Emma Griffith, one of Fitch’s Directors, uncertainty at the federal level as MAP-21 is set to expire may put pressure on states to place new tolls on previously non-tolled roads.
“Federal funding to state DOTs is down 22%, including a 7% cut due to sequestration, which is leading states to implement new [fuel] taxes, fees, and P3s to maintain and expand roadways,” said Griffith. “It’s all related to that growing lack of federal funding.”