Public-private partnerships, commonly called P3s, won't fill all of Pennsylvania's growing transportation deficit, but they do provide the state with another valuable tool to help finance some projects to keep us moving.
P3s, long championed by Altoona's Rep. Rick Geist, will allow a seven-member board to enter into agreements with private corporations to finance certain transportation-related facilities including roads, bridges and public transit - in exchange for the right to collect revenue from the project.
Before adjourning for its summer break, representatives sent House Bill 3, sponsored by Geist, to the governor, who signed it on Friday, making it Act 88 of 2012.
The potential benefits of having this option are evident.
For example, say a new road is needed from Point A to Point B, but the state lacks the money to build it. Under a P3 agreement, the state could agree with Corporation X to construct and maintain the road and collect tolls from users for a set period of years. The state retains ownership of all facilities under P3s.
The state gets the road without burdening taxpayers or having to shoulder additional debt. The people enjoying the benefits of the road pay for the privilege of using it. And the company fronting the money for the project profits by collecting tolls or fees.
In many ways, it's similar to the way a turnpike operates.
Such projects already are happening in 32 other states.
Under Act 88, a seven-member state board, including one each appointed by the governor and the majority and minority leaders of the House and Senate, will approve any partnerships, with the Legislature having a set period of time to veto the initiatives. This allows for feedback without causing needless delays.
Many of the partnerships likely will be in high-traffic areas because of the greatest potential for return for investors, but that's also where the need and cost can be the biggest. And state money that doesn't have to be spent on those projects would be available for needed work in other parts of Pennsylvania.
The vice president of government affairs for the Pennsylvania Chamber of Business and Industry called passage of HB 3 a "great first step" in coming to grips with the state's transportation funding shortfall.
Geist, in a release said, "My legislation will open the door to unprecedented investment in Pennsylvania's infrastructure at a time when it is desperately needed and will create a multitude of jobs in the engineering and construction industries, both of which have been mired in a prolonged downturn."
The legislation does not mandate P3s. It just provides a mechanism for them when it's in the public's interest to do so.
Pennsylvania continues to underfund its transportation needs by more than $3 billion a year. P3s can't close all of that gap, but any improvement will go a long way toward improving our transportation system.
Geist rightfully should be proud to have finally shepherded this important tool that can benefit Pennsylvanians for generations to final approval.