Skip to main content

Lease the Turnpikes to Transform Oklahoma’s Road Infrastructure


Oklahoma can make a game-changing improvement in the quality of its roads, highways, and other transportation infrastructure, and in short order. Here’s how.

Back in January, I proposed monetizing large state-owned assets and using the proceeds to fund long-term budgetary needs, like underfunded pensions and transportation infrastructure. A prime candidate for monetization is the turnpike system, which I proposed leasing to private investors on a long-term basis and using the substantial windfall to improve other transportation infrastructure. Other states (most notably, Indiana) have pursued this strategy to great success, with the result being not just a financial boon to road funding but also improved management and quality of the privately operated toll roads. I conservatively estimated leasing the turnpikes would generate north of a billion dollars.


A new study indicates it would probably generate more like four times that. The Reason Foundation released a study last month proposing nine states’ toll road systems as great candidates for private leasing, including Oklahoma’s. The study illustrates just how lucrative such a transaction would be to the state. Using data from similar transactions in the US and abroad (where private leasing is more common), the study estimated the “gross valuation” of Oklahoma’s turnpikes at between $4.3 billion and $6.4 billion. 


After paying off all debt (the Oklahoma Turnpike Authority has inexplicably racked up extensive bonded indebtedness to continue building lightly-used toll roads to nowhere), the state would net an estimated $2.3 billion to $4.5 billion. Looking closely at the methodology, the low end estimates in this study were extremely conservative when compared to real-world transactions. The study points out that the few private toll road leases that have been put out to bid in the US in recent years have generated substantially more revenue than was estimated. So the actual figure for Oklahoma would likely be closer to the high end $4.5 billion estimate than the low end.


To put this in perspective, consider the following. Oklahoma’s “CIRB” (County Improvement for Roads and Bridges fund) has a 5-year plan that constitutes the state’s entire contribution to improving local roads and bridges, and the cost of every project on the 5-year plan totals less than $1 billion. The highest priority local road and bridge projects are on the CIRB plan, including 313 bridges and nearly 600 miles of roads. Leasing the turnpike system would fund CIRB four times over.


The Oklahoma Department of Transportation’s 8-year plan—the plan for all the critical highway and bridge projects ODOT intends to fund over the next 8 years—assumes a TOTAL expenditure of around $6 billion, including federal funds. A private lease of the turnpikes would fund nearly the entire 8-year plan, and would easily cover the state’s contribution. This is something the state could never otherwise hope to accomplish a single year, even with a massive tax increase or drastic shift in spending priorities. It would also annually free up state resources for other infrastructure projects or other spending priorities.


Leasing the turnpike system would generate massive funding for a core function of state government, improve the quality and operation of the turnpike itself for Oklahoma drivers, and offload state maintenance responsibilities. By my lights, that’s about as close to a win-win as we could hope for in state government.


Benjamin Lepak is Legal Fellow at the 1889 Institute. He can be reached at blepak@1889institute.org. 

Popular posts from this blog

1889 Institute's Statement Regarding School Closures

The 1889 Institute, an Oklahoma think tank, has released the following statement regarding Joy Hofmeister’s proposal to keep schools closed for the remainder of the school year. We at the 1889 Institute consider Joy Hofmeister’s proposal to close Oklahoma’s schools for the rest of the school year a gross overreaction to the coronavirus situation. Even in the best of times and circumstances, suddenly shifting every student in the state from traditional classrooms to online distance learning will have negative educational consequences. This in addition to the economic burden on two-earner families forced to completely reorder their lives with schools closed. We believe many of our leaders have overreacted to worst-case scenarios presented by well-intended health experts with no training or sense of proportion in weighing the collateral damage of shutting down our economy versus targeting resources to protect the truly vulnerable. We say reopen the schools and stop the madness. ...
Read more

If Licensing Protects Consumers, Why Are Licensing Laws Blatantly Anti-Consumer?

Once upon a time, there was a small island whose economy revolved around scuba-diving tourism. Unfortunately, the island elected legislators who considered scuba dangerous. Inexperienced divers would surface too quickly and get the bends. The legislature, wanting to make diving feel safer, passed a law that banned sharks in designated scuba diving zones. There were no known cases of sharks attacking divers, nor were divers being frightened into surfacing too quickly by sharks. This is what most occupational licensing schemes look like. Legislators act, giving the public a sense of security, and giving powerful industries protection from competition. The laws do almost nothing to help consumers. Not only are they futile, they are also deceptive.   Some licensing regimes, like the Oklahoma Real Estate Broker ’ s Act, take the deceit one step farther. Instead of just telling the sharks not to eat people (which they weren’t doing anyway) the act does the equivalent of gathering a group...
Read more

COVID-19 Proves Our Schools Are Social Service Centers First, Education Institutions Second

There is no way the 180-day (or 1,080 hours) school year can be completed by the end of previously established school calendars for this year given the fact that spring break has now already been effectively extended an additional two weeks. One option would have been to extend the school year into the summer. Given the level of family togetherness being experienced now, and the fact that incomes are being lost and many would be interested in making up the losses, it’s not unreasonable to expect vacation plans to be radically remade or canceled anyway. Instead, Oklahoma’s State Board of Education precipitously closed the schools and did not call for an extension of end-of-school dates. Thus, the summer option has been foreclosed. The State Board is within its rights. Oklahoma statutes (70 O.S. § 1-109 E) state, “A school district may maintain school for less than a full school year only when conditions beyond the control of school authorities make the maintenance of the term imp...
Read more

Follow the Science: Eliminate Social Distancing and Focus Resources to Protect the Vulnerable

As the country entered into an election year, COVID-19 reared its head and became an unusual campaign issue. Exposed to extreme politization, facts were buried in an abundance of misinformation perpetuated by the invocation of “science.” With the overly polarized rhetoric of stump speeches mercifully behind us, it is time to return to the rigor and integrity in research that public policy deserves. Now that the polls have closed, let’s move on, dig into the facts, and, indeed, follow the science.   Upon the outbreak of the novel coronavirus, SARS-CoV-2 and the COVID-19 illness, little was known about it. Symptomatically, it was even difficult to tell whether or not one had the disease given that the list of symptoms seemed to expand continually. Despite what little information existed, there was no lack of self-proclaimed experts claiming the knowledge necessary to contain the disease. With the state's presumptive authority and dubious expertise, numerous state and local governmen...
Read more