By Liz Farmer | Governing
A proposal included in President Obama’s State of the Union that is intended to encourage more private involvement in public infrastructure projects appears promising — but whether it would actually result in more development remains in doubt.
The so-called Qualified Public Infrastructure Bonds, or QPIBs, would expand an existing financing tool that allows state and local governments to issue tax-exempt bonds to pay for public infrastructure projects managed primarily by private companies. That program, Private Activity Bonds (PABs), has already been used to support financing for more than $10 billion of roads, tunnels and bridges. For example, tax exempt PABs were used to help finance 29 miles of managed express lanes on Interstate 95 in northern Virginia. Gov. Terry McAuliffe has said the $950 million project, which opened in December, would not have been possible without the partnership of Fluor Enterprises and Transurban, which invested $280 million in the project and will collect tolls and maintain the lanes until 2087.
