In recent years cities and states have expanded the use of public–private partnerships (P3s) to the sale and lease of existing infrastructure and facilities for large sums of up-front cash. Proponents have viewed these practices as effective and innovative ways to raise sorely needed funds and address pressing fiscal problems. If P3 revenues are used to finance operating expenditures, these practices represent a fundamental departure from the traditional principles of balanced budgets for state and local governments. In financing capital project they are an expensive alternative to traditional tax-exempt financing and productive efficiencies in the private sector are unlikely to offset higher costs of capital. Furthermore, these practices are unlikely to improve infrastructure pricing and use and entail significant policy/economic risks as governments lose control of infrastructure for significant periods of time. The adoption of these sales or leases can be traced to political and institutional failures and inappropriate analysis.
ArnottR.KrausM. (1998). Self-financing of congestible facilities in a growing economy. In PinesD.SadkaE.ZilchaI. (Eds.), Topics in public economics (pp. 161-184). Cambridge, UK. Cambridge University Press.
2.
ArnottR. J.SmallK. A. (1994). The economics of traffic congestion. American Scientist, 82, 446-455.
3.
ArrowK. J. (1970). The organization of economic activity: Issues pertinent to the choice of market versus nonmarket allocation. In U.S. Joint Economic Committee, 91st Congress, 1st Session, The analysis and evaluation of public expenditure: The PPB system (Vol. 1, 59-73). Washington, DC: U.S. Government Printing Office.
4.
ArrowK. J.FisherA. C. (1974). Environmental preservation, uncertainty and irreversibility. Quarterly Journal of Economics, 88, 312-319.
5.
BelG.FagedaX.WarnerM. E. (2010). Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services. Journal of Policy Analysis and Management, 29, 553-577.
6.
CaliaR.MsallL. (2011, June8-13). The Chicago experience, a P3 checklist. Government Finance Review, 27, 8-13.
7.
City of Chicago. (2001). Official statement: Special transportation revenue bonds, Series 2001. Chicago, IL.
Crowe Chizek and Company. (2006). State of Indiana: Indiana East-West Toll Road financial analysis. Indianapolis, IN.
11.
EnrightD. (2006a). The Chicago Skyway sale: An analytical review. Jersey City, NJ: Northwest Financial Group LLC.
12.
EnrightD. (2006b). Then there were two: Indiana Toll Road vs. Chicago Skyway. Jersey City, NJ: Northwest Financial Group LLC.
13.
FergusonN. (2011, February28). Sale of the century: The deficit debate remains fixed on tax hikes and spending cuts, but there is another option. Newsweek, 2-3.
14.
GarvinM. J.BossoD. (2008). Assessing the effectiveness of infrastructure public-private partnership programs and projects. Pubic Works Management & Policy, 13, 162-178.
15.
GoodD. (1992). Productive efficiency and contract management: Some evidence from public transit agencies. Public Finance Quarterly, 20, 195-215.
16.
GrayG.CusatisP.FooteJ. (2008). An analysis of financial and strategic alternatives for the Pennsylvania turnpike. Study commissioned by Democratic Caucus of the Pennsylvania House of Representatives.
17.
Macquarie Atlas Roads. (2011). Financial Report for the Period Ending 31 December 2010. Sydney, NSW, Australia.
18.
MarkowitzH. M. (1952). Portfolio selection. Journal of Finance, 7, 77-91.
19.
MohringH. D.HarwitzM. (1962). Highway benefits: An analytical framework. Evanston, IL: Northwestern University Press.
20.
MorrisonS. A. (1986). A survey of road pricing. Transportation Research, 20, 87-97.
21.
NewellR. G.PizerW. A. (2003). Discount the distant future: How much do uncertain rates increase valuations?Journal of Environmental Economics and Management, 46, 52-71.
22.
Office of the Inspector General, City of Chicago. (2009). Report of inspector general’s findings and recommendations: An analysis of the lease of the city’s parking meters. Chicago, IL.
23.
OrtizI. N.BuxbaumJ. N. (2008). Protecting the public interest in long-term concession agreements for transportation infrastructure. Public Works Management & Policy, 13, 126-137.
24.
PriceW. T. (2001). The odyssey of privatizing highways: The evolving case of SR 91. Public Works Management & Policy, 5, 259-269.
25.
RoinJ. A. (2011). Privatization and the sale of tax revenues. Minnesota Law Review, 95, 1965-2034.
26.
SamuelsonP. A. (1954). Pure theory of public expenditures. Review of Economics and Statistics, 36, 387-389.
27.
SavasE. S. (2000). Privatization and public-private partnerships. New York, NY: Chatham House.
28.
ShoupD. C. (2005). The high cost of free parking. Chicago, IL: American Planning Association.
TobinJ. (1958). Liquidity preference as behavior towards risk. Review of Economic Studies, 25(2), 65-86.
33.
U.S. Congressional Budget Office and Joint Committee on Taxation. (2009). Subsidizing infrastructure investment with tax-preferred bonds. Washington, DC.
34.
U.S. General Accounting Office. (1999). Public-private partnerships: Terms related to building and facility partnerships (GAO/GCD-99-71). Washington, DC: US Government Printing Office.
35.
U.S. Government Accountability Office. (2008). Highway public-private partnerships: More rigorous up-front analysis could better secure potential benefits and protect the public interest (GAO-08-44). Washington, DC: US Government Printing Office.
36.
ViningA. R.BoardmanA. E. (2008). Public-private partnerships: Eight rules for governments. Public Works Management & Policy, 13, 149-161.
37.
ViningA. R.BoardmanA. E.PoschmannF. (2005). Public-private partnerships in the US and Canada: There are no free lunches. Journal of Comparative Policy Analysis: Research and Practice, 7, 199-220.
38.
WeimerD. L.ViningA. R. (2011). Policy analysis: Concepts and practices (5th ed.). Upper Saddle Ridge, NJ: Pearson Prentice Hall.
39.
William Blair and Company. (2009). Chicago metered parking system transaction summary and valuation analysis. Chicago, IL.
