Due to Tennessee’s success as a great place to live, work and play, traffic congestion is becoming more prominent throughout the state, and not just in urban areas. Rural Tennesseans are experiencing significant changes in the reliability of their travel times. Tennessee also lies at the crossroads of some of the most significant freight corridors in the country, which are forecast to grow significantly in the future, further underscoring the urgency of roadway improvements to address congestion. According to the Texas A&M Transportation Institute’s (TTI) Urban Mobility Report (UMR) the cost of congestion in the 11 smaller urban areas of Tennessee per commuter is $670 annually; in the larger urban areas of Chattanooga, Knoxville, Memphis it is $989 annually, and the average cost of congestion in the Nashville urban area is $1,465 per commuter annually. Commute times are anticipated to increase by 60% and intercity travel times between major Tennessee cities will increase by up to one hour.
The cost of improving Tennessee’s transportation infrastructure far exceeds available revenues. The backbone of TDOT’s revenue stream is motor fuel taxes (charged per gallon of gasoline), which is being eroded through a confluence of factors. Increasing fuel economy of the vehicle fleet, exacerbated by the emergence of hybrid and purely electric vehicles, is putting downward pressure on fuel tax projections. In fact, TDOT forecasts that motor fuel tax collections will remain static over the next 10 years, in spite of increasing vehicle-miles traveled.
Click here to view current revenue chart.
Whereas revenues for transportation are expected to level off, the transportation needs of the state are growing exponentially. TDOT estimates $26 billion is needed to address both urban and rural congestion in Tennessee. Of that total, only $3.6 billion is already contemplated as part of the 2017 IMPROVE Act projects list. Of TDOT’s $1.2 billion for annual construction and maintenance, only $500 million per year is available for the construction of projects that would move the needle on congestion. This yawning gap between revenues and needs puts Tennessee’s continued economic development and prosperity at risk.
Finding Solutions to Traffic Congestion
We aren’t going to raise the gas tax and we aren’t going to take on debt. With a lack of revenue and a necessity to build, we have looked to our peer states such as Texas, Florida, Georgia, North Carolina and Virginia on how they have addressed similar problems: Public-Private Partnerships, or P3s.
P3s allow private investment in new roadway infrastructure. Tennessee is currently the only state in the southeastern United States that does not allow such partnerships for the development of roads and bridges. Under these arrangements, a private sector partner enters into an agreement with the state DOT to design, build, finance, operate and maintain infrastructure projects, such as Choice Lanes.
We believe Tennessee’s construction industry providers will continue to build the $1.2 billion annual construction and maintenance program plus the projects created through alternative revenue sources. In P3 delivery of Choice Lanes, an average of 70% goes to local contractors. For example, the Texas LBJ Managed Lanes cost $2.6 billion; local contractors received $1.8 billion on top of Texas’ annual program.
Benefits of P3s
Using P3s for the development of Choice Lanes, also known as managed lanes in other states, provides for a powerful approach to addressing urban area congestion, while preserving critical funds to address congestion-related challenges in rural areas, like widening the interstates to three lanes.
Under these arrangements, a private-sector partner enters into an agreement with the state DOT to design, build, finance, operate and maintain Choice Lanes. Choice Lanes are optional, priced lanes that run alongside existing interstates and provide a choice for motorists to bypass congestion when desired, offer a clear path for transit operators and create an alternative to the roads that exist today with more reliable trip times. Motorists have the choice to pay to use the lanes or use the free, general purpose lanes, and transit riders can use the Choice Lanes without paying any additional fees and receive the more reliable trip times that Choice Lanes offer.