CHICAGO — Illinois Gov. Pat Quinn this week signed legislation that paves the way for the state's future use of public-private partnerships to finance transportation projects, a change supporters hope will jump-start proposed projects that lack public funding.
The Public-Private Partnership for Transportation Act enables the state Department of Transportation and the Illinois State Toll Highway Authority to develop, finance, and operate transportation facilities by partnering with private entities. It lays out a framework for the agreements, operating standards, financing arrangements, and labor and oversight. It also limits the privatization of existing transportation assets through leases to private companies.
"This law will keep Illinois economically competitive," said Peter Skosey, a vice president at the Metropolitan Planning Council who worked to win passage of the measure. "The West Loop Transportation Center, a bus rapid-transit network, the Elgin O'Hare Western Bypass — these projects represent just a sliver of the billions of dollars in transportation projects Illinois has put on the back-burner because funds for building new infrastructure projects simply are not available."
The council and other supporters believe private partnerships provide a good option because state motor fuel tax revenues have not kept up with inflation and any new federal funds to come from a surface transportation bill would likely fall short of needs. Transportation projects account for a good chunk of the state's $31 billion capital plan but those funds, too, are not sufficient to cover maintenance and new project needs.
The General Assembly approved HB 1091 during its spring session and Quinn signed it on Tuesday. Its sponsors were Rep. Elaine Nekritz, D-Des Plaines, and Sen. Heather Steans, D-Chicago, and it was widely endorsed by local governments, planning agencies, and labor.
The legislation allows the toll authority to use P3s only on new construction projects and it bans the leasing of the authority's existing assets for a financial gain. The toll authority on Thursday will discuss and could vote on a toll hike to fund a proposed $12 billion capital program that calls for improvements to existing roadways and the construction of new ones.
The legislation requires that the General Assembly sign off on all potential projects prior to the issuance of a request for proposals or qualifications process. It also requires a competitive process or a design-build procurement process in the selection of a private partner. The Commission on Government Forecasting and Accountability is charged with conducting an independent review of all project proposals prior to final approval.
On financing, the legislation allows the state to provide tax-exempt bond financing or funding through applicable federal programs, but it prohibits the use a state general obligation pledge on any debt. It also allows for the use of public funds to help finance the project.
At least 30 states already have enabling powers to use P3s to finance infrastructure, but Illinois had lacked such authority even as various commissions are exploring the use of such agreements. A state-appointed advisory council recently concluded that the Illinois DOT and toll authority should consider a P3 to finance construction of a western bypass expressway around O'Hare International Airport. A commission is also exploring how a P3 could assist in the financing and construction of high-speed rail in the state.
Chicago was able to enter into a series of asset leases, beginning in 1995 with its groundbreaking $1.8 billion lease of the Chicago Skyway toll bridge, due to its home-rule powers, though it did require changes in state law to allow the deal.