Issue link: http://read.dmtmag.com/i/280096
March 2014 | Construction Equipment Distribution | www.cedmag.com | 31 neither the state nor the private sector alone could afford. Although many are wary of PPPs given the risk of unfavorable contract terms and limited state control, state legislatures should continue to pass PPP-enabling legislation because the benefits of a well-executed project far exceed the risks. By requiring upfront payments, states can ensure a consistent revenue stream during the lifetime of the asset and create a regular selection process to choose the best projects. Many of the risks of PPPs can be properly mitigated in the contractual agree- ments for these projects. Policy recommendations concern- ing roadway infrastructure often do not highlight bond issues, but bonds play an important role in roadway financing. Bonds are the least risky financing mechanism and offer the most flexibility for small projects. States can minimize many of the risks associated with bonds by ensuring debt service costs resulting from a new bond issue do not cause a state to exceed its ability to service all of its debts. Bonds should continue to be used in roadway financing strategies both as a relatively safe option for projects and as a strong supporting mechanism for SRFs and PPPs. 'LYHUVLÀFDWLRQ,V.H\ Developing a successful strategy for funding and financing roadway infrastructure is a complex and state-specific process. No state can successfully rely on any single funding or financing mechanism. Therefore, state legislatures must increase their emphasis on employing multiple mechanisms to fund and finance road construction and maintenance. Whether legislators are interested in improving road safety or generating economic activity, investment in their roads is a sound policy to meet valued public goals. The authors are graduate students in public policy at the College of William & Mary in Williamsburg, Va. How States Pay For Highways FUNDING FINANCING State General Funds Fuel Taxes Sales Taxes on Fuel Vehicle Registration Fees Tolls Bonds State Revolving Funds PPPs Authorized AL D D D D D AK D D D D D D D AZ D D D D D D AR D D D D D D CA D D D D D D D D CO D D D D D D D CT D D D D D D DE D D D D D D D FL D D D D D D D GA D D D D D D D D HI D D D D ID D D D IL D D D D D D D IN D D D D D D D IA D D D D KS D D D D D D KY D D D D LA D D D D D D ME D D D D D D MD D D D D D MA D D D D D D MI D D D D D D MN D D D D D D D MS D D D D D MO D D D D D MT D D D NE D D D D D NV D D D D D NH D D D D D NJ D D D D D NM D D D D D NY D D D D D D D NC D D D D D D ND D D D D D D OH D D D D D D D OK D D D D D D OR D D D D D D PA D D D D D D D RI D D D D D D SC D D D D D D D SD D D D D TN D D D D D TX D D D D D D D UT D D D D D D D VT D D D D D D VA D D D D D D D WA D D D D D D WV D D D D D D D WI D D D D D D WY D D D D