Restricting PPP-related revenues from a state's general fund.

Not all PPP projects provide toll revenue for states to use, but allowing states to redirect toll facility revenues into their general fund is controversial. States allowing the state treasury to divert funding from any tolled facilities (not just PPP facilities) to pay for other non-transportation services can undermine support for tolled facilities in general, but diversion of this kind is a more politically popular way for cash-strapped states to raise funds for other services. In the case of the Indiana Toll Road, part of the $3.85 billion concession fee is transferred to fund a 10-year highway modernization project (Poole 2007). Some consider this Indiana case an innovative transportation financing. But others express a serious concern due to the expedited spending of the concession fee in the short term in exchange of a private management of the toll road for the next 75 years, which poses a significant level of uncertainty to the public. In the case of the Chicago Skyway, the $1.9 billion concession fee was used for providing other city public services, such as social services, and reducing debt (Seliga 2007; Brown 2007). Controversy arose because some of this money was used for non-transportation purposes, but only after the outstanding Skyway debt had been repaid (Ortiz and Buxbaum 2008). This diversion of the fund was made available for other services because the bridge was a city asset (Johnson, Luby, and Kurbanov 2007).

Eleven states restrict tolled PPP facility revenues from the state's general fund. Arizona restricts toll revenues in a PPP agreement to a highway user fund and regional road fund. Virginia does not limit these excess funds from going to public transportation funds but only instructs that the funds "may" go to the general transportation fund or the private entity to help pay off the debt. Ideally, states should keep transportation revenues separate from other funding sources unless alternative arrangements were made clear to the legislature and public.