Wednesday, February 12, 2014
At the pump and in our tax bills, we all pay for road and bridge infrastructure. But what if the infrastructure could also pay you? A new approach—an investment public-private partnership (IP3) combined with a public trust fund—could not only generate substantial revenues, says Cornell University's Rick Geddes, it could also mean annual dividend checks for citizens. Geddes discussed this proposed approach at the CTS Winter Luncheon.
In the IP3 approach, the value embedded in U.S. infrastructure is released through pricing to make that pricing politically feasible. A portion of the wealth generated from lease concession agreements is preserved in perpetuity through a permanent fund—a type of public trust fund. Permanent funds are currently in use in Alaska, Alberta, Texas, Norway, and many other jurisdictions to preserve natural resource wealth.
Following Alaska's example, Geddes proposed that investment income from the fund be used to provide an annual dividend payment to all households within newly priced regions. The IP3 thus creates direct citizen-stakeholdership in transportation infrastructure, which increases public support for pricing and encourages households to take a greater interest in infrastructure maintenance and operation.
Rick Geddes is an associate professor in the Department of Policy Analysis and Management and director of the Cornell Program in Infrastructure Policy at Cornell University. Geddes is also a research associate of the Mineta Transportation Institute at San Jose State University. He was a commissioner on the National Surface Transportation Policy and Revenue Study Commission from May 2006 to January 2008. His research focuses on public policies surrounding private infrastructure investment. He is the author of The Road to Renewal: Private Investment in U.S. Transportation Infrastructure (AEI Press, 2011).