Late last month Wilbur Smith Associates held the first symposium regarding the potential use of Public-Private Partnerships in Arizona following passage of HB 2396 (transportation; public-private partnerships) last session.  The measure was a re-write of statute that governs how ADOT may handle proposals and projects that utilize alternative funding mechanisms.  The measure faced a lot of opposition: “The hostility was pretty strong,” commented Andy Biggs, sponsor of the measure.  “The measure got caught up in the economic downturn and began receiving significant attention as the economic situation continued to deteriorate.”  

Arizona’s tremendous infrastructure needs are not being met by the traditional user-pay model of transportation funding – the gas tax.  As such, public entities are seeking to shift risk away from the public sector without giving up ownership of infrastructure projects.  Performance Based Infrastructure allows the private sector to absorb the risk and maintain the public interest. Obviously, the counties that have the most to gain with the new approach are those seeking to accommodate abnormally fast growth in the previous years. 

The measure appears to allow counties to offer Performance Based Infrastructure, with approval by ADOT, to address road-building needs.  ADOT continues to examine how they intend to implement the new statute for the benefit of Arizona taxpayers, with a strong focus on mobility and sustainability.  

Slides from the presentations may be seen here.

The federal airport and surface transportation programs were scheduled to expire on Sept. 30, however, Congress took action to extend these programs — airports for three months and surface transportation (highway and transit programs) for one month.

Because Congress failed to reauthorize multi-year legislation for these programs, action was needed so that funding would be continued, even for a short period of time.

NACo supports reauthorization of these crucial programs as legislative priorities for 2009 and would like to see extensions passed so that funding continues to flow. Hundreds of county airports receive federal airport funding, and counties across America get federal highway, bridge and mass transit assistance.

This problem has been addressed on two fronts.  The House on Sept. 23 passed separate bills extending each of these programs for three months, through Dec. 31. The Senate passed the same three-month extension for the airport program only on Sept. 24. The airport extension has been sent to the White House and signed by the president. This means the federal government will continue to be able to collect ticket taxes and fuel taxes to support its investment in airport infrastructure until the end of 2009. 

The surface transportation program extension has been more problematic.  While the House has adopted a three-month extension, the Senate was indicating that it would like to pass an 18-month extension of the surface transportation program, an action the Obama administration supports.

With the clock ticking, the Senate backed off the 18-month extension and decided to consider the three-month option.

However, this was complicated by the Senate’s desire to repeal an $8.7 billion highway funding cut, which was scheduled to occur on Sept. 30. This repeal was not part of the House extension because under House rules a portion of that $8.7 billion, close to $500 million, would have to be offset by cuts in other programs.

The Senate was unable to figure out how to pass a three-month extension and a repeal of the rescission by Sept. 30, so another short-term solution was adopted. As part of the continuing resolution (CR), the surface transportation program was extended for one month. The CR is the legislation that Congress passes almost every year in late September to continue funding for those programs whose appropriations bills have not passed and for those programs, like airports and surface transportation, whose authority to continue to collect user fees and spend money are about to expire. 

Time is running out to join us at the 5th Annual CSA Legislative Summit!