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

No License, Sherlock: Licensing for Private Investigators

What does a private investigator do? Surely, we’re all familiar with various movies and shows featuring the exciting adventures of Sherlock Holmes or Magnum PI. However, reality is often disappointing, and the fact is private investigation is usually dull and relatively safe. Private investigators are tasked with conducting surveillance and fact-finding missions for their clients, but they gain no special powers to do so.  My recent paper deals with the licensing of private investigators. Oklahoma’s private investigator licenses are governed by the Council of Law Enforcement Education and Training (CLEET), which follows the advice of a committee made up of people who run private investigative agencies. Improved competition is not likely to be in the best interest of these agencies, so it is questionable whether they should be in a gate-keeping position they could easily turn to their advantage. Private Investigators must undergo a series of trainings and pas...
Read more

‘Tis the Season for Humility

When pride comes, then comes disgrace, but with humility comes wisdom. Proverbs 11:2 Christmas is almost here and, being a Christian, this time of year always gets me thinking about the religious aspects of the holiday. The 1889 Institute does not have a religious mission, and so it’s certainly not my purpose here to proselytize. There is an aspect of the larger story of Christmas, however, that all men of all creeds do well to remember and take heed. This is the concept of humility and what it really means. Whether one considers it myth or historical truth, the Bible teaches that God humbled Himself and came to earth as a man, deigning to be born in a barn to a carpenter’s household and grow up to wear, not a crown of gold and jewels, but one of thorns for the occasion of a tortured, earthly, sacrificial death. Without going into the theological aspects of the story, it is plain that it is, if nothing else, a lesson in extreme humility. Humility is a lesson that has been...
Read more

Muddy, Shallow Thinking Versus Clarity in Education Reform

Monopolies are the best! If we are to gain maximum efficiency and create the greatest value for people, monopoly is the way to go. Competition creates administrative inefficiency since instead of one set of managers, there are as many as there are companies, and all of them cost money. Competitive companies make products that do the same basic things, but waste resources by making products with different features. Standardized products would save money. Were research and development under one roof, instead of many competitive ones, researchers could coordinate more closely, saving money and ultimately being even more innovative. Monopolies would therefore benefit everyone. Everything in the first paragraph is, of course, balderdash . Monopolies, especially those created by government, stifle innovation, develop bloated management, produce too little at low quality, and charge too much. Why? Because they can. They’re monopolists. Without competition and with nearly guaranteed ...
Read more

Present Reforms to Keep the Ghost of State Questions Past from Creating Future Headaches

Oklahoma, like many western states, allows its citizens to directly participate in the democratic process through citizen initiatives and referendums. In a referendum, the legislature directs a question to the people — usually to modify the state constitution, since the legislature can change statutes itself. An initiative requires no legislative involvement, but is initiated by the people via signature gathering, and can be used to modify statute or amend the constitution. Collectively, the initiatives and referendums that make it onto the ballot are known as State Questions.   Recently, there have been calls to make it more difficult to amend the constitution. At least two proposals are being discussed. One would diversify the signature requirement by demanding that a proportional amount of signatures come from each region of the state. The other would require a sixty percent majority to adopt a constitutional amendment rather than the fifty percent plus one currently in place. ...
Read more