Pennsylvania policy makers decided not to lease the Pennsylvania Turnpike in 2008. But the state's infrastructure funding gap persists and Pennsylvania may once again explore such a deal. Public-private partnerships are likely to come up for debate in other states as well, as their massive infrastructure needs continue to lead them toward new and different funding sources.
The complexity and implications of these deals require that state policy makers be as well informed as possible as they pursue them. A variety of papers have been written that can help leaders think critically about public-private partnerships. But much also can be learned from the experiences of other policy makers-those who have decided to enter into a long-term lease and those who opted not to move forward with a deal, as in Pennsylvania's case in 2008.
During the last six months, the Pew Center on the States explored how state policy makers should proceed as they consider a lease of an infrastructure asset, including the questions they should ask and the information they should obtain. We examined those principles through a study of the proposed lease of the Pennsylvania Turnpike. Our work included reviews of the lease proposal and relevant documents, and interviews with state officials and advisors, legislators, representatives of the bidders and transportation and finance experts. Finally, where applicable, we also applied research we conducted on other domestic and international concessions.
The process involved in the consideration of a long-term lease of an infrastructure asset falls into four main stages:
1. Examining the options: the decision-making process;
2. Let's make a deal: the deal-making process;
3. Show me the money: the financial components of a public-private partnership; and
4. Who will mind the store: the oversight and management of such a deal.
Our analysis describes the key elements of each stage and assesses Pennsylvania's experience as policy makers debated a proposed lease of the Pennsylvania Turnpike.