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P3's Probably Not for 'Pay-As-You-Go' Tennessee

"Just another form of debt which we don't do in Tennessee."

January 31, 2017

Tennessee Governor Bill Haslam is in full agreement with President Trump's views on the need for new spending on crumbling or new transportation infrastructure, but he doesn't think Trump's idea for public/private partnerships to finance the work will help Tennessee for one simple reason - Tennessee pays for its roads without taking on debt and resulting interest payments by issuing bonds. It's strictly pay as you go.

In the Chattanooga Times Free Press, Haslam said, "I've heard of a lot about infrastructure projects that took the form of public/private partnerships, which is just another form of debt which we don't do in Tennessee."

Tennessee's current $1.87 billion transportation budget relies on $1 billion from the federal government's own fuel taxes which are shared with states but haven't been increased in years. Haslam told reporters this week. "We would love it [a Trump proposal] if it was something that followed traditional revenue where states get 'x' percent of that revenue and we could count on that for our long term needs. "So far," Haslam added, "we haven't heard anything along those lines."

Haslam is working on a transportation plan for the state that would include a substantial increase in vehicle fuel taxes, vehicle registration fees, and a 3 percent charge on rental cars. The state has a current backlog of about 1,000 road projects which would cost $10.5 billion, some of which are on the list Trump requested of projects that are ready to start if money was available.

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