June 26, 2006

States seek transport funds in many ways: report

WASHINGTON (Reuters) - A growing gap between the funds
needed and the money available for roads and bridges will keep
U.S. state officials looking for new funding methods, such as
leasing toll roads to private companies and selling more bonds,
a new report said on Monday.

"State officials are confronted with the stark reality that
less money is available for transportation projects," said a
new report by the National Conference of State Legislatures
released on Monday.

States have traditionally relied on concurrent sources of
cash, such as tax revenues and tolls, to fund transportation
projects, the report said. But in the last decade
transportation needs have far outstripped growth of funding

This has pushed states more toward seeking public-private
partnerships, whereby a toll road is leased to a private
company in exchange for a big upfront payment, the report said.

"More states are now exploring the use of public-private
partnerships to fund and support needed transportation
projects," the report said.

As many as 23 states have statutes in place that enable the
use of private entities in funding transportation projects,
according to the report.

Chicago and Indiana have leased toll roads to a private
company. Texas and Virginia have recently passed legislation
that paves the way for similar deals, according to the NCSL.

Another 10 states, including California and Texas, will
consider legislation regarding toll roads this year, the NCSL

Also, states are relying even more on debt financing and
other more innovative ways of raising money for transportation,
the report said.

For example, Oregon recently began a pilot program where it
charges residents a mileage fee based on how much they actually
drive in the state, the report said. This includes the use of
global positioning technology that enables special devices to
measure in-state mileage of the test cars involved.