[Cover Letter]

March 2009

Dear Reader:

America's infrastructure is in desperate need of repair. Our deteriorating highways, roads and bridges and the increasing demands for new transportation networks have left us with an annual gap of $47 billion between the projects the nation needs and those it can afford. The stakes are high: failing to close the gap and improve our infrastructure could hurt states' ability to attract businesses and compete in the global economy, and reduce the quality of life for millions of Americans.

In today's economic crisis, bridging the gap will take new ideas and new sources of revenues. Increasingly, cash-strapped states are considering public-private partnerships to generate new money for needed projects. Public-private partnerships have been used around the world for years to underwrite infrastructure, but they've only recently gained a foothold in the United States. The deals are complex, typically stretching for decades and involving billions of dollars.

In this report, the Pew Center on the States analyzed Pennsylvania's recent debate about leasing its turnpike as a case study to determine whether lawmakers had the information they needed to make a sound decision, and to highlight what other states can learn from those deliberations. Pennsylvania's experience will be useful to policy makers across the country as they examine public-private partnerships and consider such deals to fund their infrastructure needs.

The Pennsylvania case-and the experiences of other states and countries-illustrate how long-term deals are often debated with a short-term perspective. Pennsylvania policy makers did a lot right in their first exploration of such a lease, but they fell short in key areas of how the deal was proposed, structured and handled. If Pennsylvania and other states want to pursue successful public-private partnerships, more questions need to be asked-and answered.

Driven by Dollars builds on the work of the Center, which grades states on how well they manage their infrastructure and assesses states' fiscal health and economic competitiveness. We hope this report will help inform and guide states as they consider public-private partnerships as a way to fund their infrastructure needs.