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Tennessee legislature passes P3 package allowing toll express lanes

Tennessee will turn to tolls and public-private partnerships to meet the mounting costs of managing its roadways.

Gov. Bill Lee’s Transportation Modernization Act cleared its last legislative hurdle Thursday as theGeneral Assembly approved his $3.3 billion package allowing for the use of P3s for highways for the first time in the state’s history.

“Tennessee is the fastest-growing state in the nation, and it’s important we have a transportation strategy that keeps up with the pace to prepare for continued growth and economy opportunity across our rural and urban communities,” Jade Byers, the governor’s press sectary said in an email interview. “The Governor’s plan will give TDOT the resources needed to solve the state’s current and future mobility challenges, all without new taxes or debt.”

Under the new plan, private companies can “design, fund, build, maintain and operate” roads on a leased basis, fronting the cost of redevelopment and in turn making a profit by operating tolled expressways referred to as “choice lanes” that would offer drivers faster routes for a price, similar to existing so-called “Lexus lanes” in Texas, Florida, Georgia, and Virginia.

Tennessee is one of five states that require road repairs be funded on a pay-as-you-go basis and its road fund is currently supported by the state’s gas tax that nets around $1.2 billion annually. According to a report from the Tennessee Advisory Commission on Intergovernmental Relations, the state faces $61.9 billion in necessary infrastructure improvements through 2025 which officials link to population growth and increased commercial traffic in the state.

Sen. Becky Massey, a Republican co-sponsor of the bill, said that said Tennessee’s population has grown almost 10% in 10 years, putting strain on roadways already functioning as interstate travel arteries for passengers and cargo bound in all directions.

“It brings us great economic opportunities, but it also presents challenges to moving people, goods, and services across our state,” Massey said. “This bill will address this growing infrastructure need, and in a fairly conservative way.”

Touting a low business tax rate and offering workforce training programs among other incentives, Tennessee has inked major deals with Ford, Volkswagen, and Toyota for production facilities.

Massey said officials are keen to protect and grow those investments and utilizing P3’s will help them do that while avoiding debt.

“It would have taken us 52 years to address pending projects, and that’s just not an option,” she said.

With more of its funds free, the state could tackle pending infrastructure for both rural and urban areas, Massey said.

Project proposals will be evaluated by a five-person state Department of Transportation committee which is allowed by law to approve five major and 15 minor projects annually. Any approved projects must then be voted on by state lawmakers.

Byers said Tennessee DOT officials will work “over the remainder of the year to develop an investment strategy,” before breaking ground anywhere. 

Massey said the projects most likely to be approved first are those situated around the state’s four metropolitan areas surrounding Chattanooga, Knoxville, Memphis, and Nashville. 

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