(The Center Square) – As task forces meet this week to discuss a controversial $10 billion plan to build 340 miles of toll roads by 2030, a California-based Libertarian think tank says Florida could save taxpayers’ money by leasing its network of turnpikes.
A study published Tuesday by The Reason Foundation, which publishes Reason magazine, said taxpayers would, for instance, save between $11 billion and $17.9 billion if the state leased the Florida Turnpike.
“The bottom line is the immense value of the Florida Turnpike system could be used to greatly improve the state’s fiscal condition,” said Reason Foundation Director of Transportation Robert Poole, a Plantation resident who wrote the study.
Using data from comparable long-term toll road leases worldwide, Poole estimates the medium-range net proceeds, after paying off outstanding turnpike bonds, would be $14.5 billion for a 50-year lease of Florida Turnpike.
Former Gov. Jeb Bush in 2000 considered leasing or selling toll roads to private operators. A consulting group rejected the idea but recommended the state create Florida Turnpike Enterprise, a public-private partnership that manages toll roads to be self-sustaining while retaining public oversight.
That approach should be reexamined, Poole writes.
“States like Florida need to examine if they are maximizing the value of existing toll roads,” Poole said. “Based on the valuations of overseas toll roads in recent transactions, we found Florida would have significant net proceeds after paying off outstanding tax-exempt toll road bonds.“
Florida toll roads would draw investors’ interest, he said.
“Despite the pandemic and recession, car usage is nearly back to normal levels in some areas and there continues to be great interest in long-term investing in U.S. toll roads,” Poole wrote. “With today’s low interest rates, these types of acquisitions are still attractive to global toll road companies, infrastructure investment funds and pension funds.”
He suggests three possible uses for lease proceeds:
- Address $64.3 billion in unfunded projects in the state’s 2045 Multi-Modal Plan;
- Reduce state debt “with the aim of achieving a higher bond rating, to permit future financing at lower interest rates;”
- Slash Florida Retirement System’s (FRS) $22 billion “unfunded liability.”
“Most toll road leases limit annual toll rate increases to the rate of inflation, as is already the practice in Florida, so drivers shouldn’t fear that,” he said. “And as an investor-financed business, a toll road company would likely speed up modernization efforts and Florida’s ongoing elimination of toll booths in favor of all-electronic tolling.”
Toll roads are a hot topic in the Sunshine State after lawmakers adopted the Multi-use Corridors of Regional Economic Significance (M-CORES) plan in 2018, Florida’s largest highway project since the 1950s.
M-CORES outlines construction of the 150-mile Southwest-Central Florida Connector from Lakeland to Naples; the Suncoast Connector, a 40-mile span linking Florida Turnpike and I-75 with Suncoast Parkway; and the Northern Turnpike Connector, which would extend Suncoast Parkway 150 miles north to Georgia.
Construction begins in 2022 and ends in 2030. M-CORES will be funded through license plate tag revenues – $1.1 billion over a decade to finance a bond; estimates top $10 billion.
M-CORES is widely opposed, including by the 80-member “No Roads to Ruin” coalition spearheaded by Sierra Club, the Conservancy of Southwest Florida, Florida Policy Institute, Conservation Foundation of the Gulf Coast and League of Women Voters.
Critics contend the “corridors” will traverse fragile wetlands, promote sprawl, imperil endangered species such as the Florida panther and open sensitive areas to development.
Last week, 1000 Friends of Florida and Sierra Club jointly released “M-CORES: A Detour Around Accountability,” which pegs the projects’ cost at $26.4 billion.