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

OG&E and the Corporation Commission Aren’t Doing Their Jobs

At the time of this writing, it’s been a full week since there was power at my home. I live within OG&E’s electrical grid, so when it comes to being without power this past week, I’m nothing special. Many of OG&E’s customers had no power for days, and some will have no power for well over a week. By the time power is restored to everyone in their service area, OG&E’s own estimate is that it will have taken ten full days to repair all the damage from Oklahoma’s latest ice storm. Ice storms are bears, no doubt about it. They are very hard on trees, and if the roads ice over, they are very hard on cars. But roads, for the most part, were not an issue during Oklahoma’s “Icemageddon” of 2020. The problem was the extra weight of the ice on trees, wires and poles. And what we discovered was that Oklahoma’s electric power grid, once again, was not up to the challenge. Fact is, Oklahoma’s power grid isn’t up to much of Oklahoma’s weather. Every time the electricity goes out, which ...
Read more

One More Suburban Draw: A Black Lives Matter Chapter in Every Oklahoma City School

“You don’t want to live in the Oklahoma City school district.” That was the universal advice I got from everyone I talked to in Oklahoma when I moved from Phoenix with my wife and son, who had a couple of years of high school left to complete. The clear and simple message was that Oklahoma City district schools were pitiful and should be avoided at all costs. You’d think that with a reputation like this, the last thing on the mind of the superintendent of Oklahoma City district schools would be to make sure every school has a Black Lives Matter chapter, but you’d be wrong. I happened to see a recent meeting of the Oklahoma City school board, and that is exactly what the superintendent, Sean McDaniel, said, that he wanted to make sure every campus had a BLM chapter. You’d think that OKC district leaders would be concerned about academics, student motivation, and how to hold both students and educators more accountable for attaining what most people think schools are for – decent educat...
Read more

Top-Ten in Low Taxes, But Oklahoma Still Has Much Room for Improvement

In a comparison of states’ total taxes as well as spending in certain broad categories that the 1889 Institute has just published ( Oklahoma Government Revenues and Spending in Perspective – Update ), some interesting facts arise. Using federal data, we compared states by looking at the percentage of personal income collected in state and local government revenues. We also looked at the percentage of personal income spent in six broad spending categories: higher education, public education, public welfare, hospitals, highways, and corrections. The data shows that in 2017 Oklahoma’s state and local governments: Extract 13.2 percent of Oklahomans’ personal income in taxes and fees, moving Oklahoma into the Top Ten lowest-taxing states, ahead of Texas.   Spend 12.38 percent of personal income on the six featured spending areas (which include federal dollars), only a little below the national average of 12.7 percent. While 9th overall (least spent being first), Oklahoma is n...
Read more

Lack of Action from Oklahoma’s Occupational Licensing Advisory Commission

Apparently, if you’re a legislator in Oklahoma and want to look like you’re doing something about an issue while not actually doing anything at all, you pass a bill to create a commission to study the issue. At least, that’s how the Oklahoma Occupational Licensing Advisory Commission (LAC) has operated so far. According to a study I did while at the Goldwater Institute, Oklahoma ranked as the 24 th most-licensed state. A study by the Institute for Justice ranked Oklahoma 35 th in how broadly and onerous its licensing laws are. But these, and similar studies, are really just counts of how many occupations states license, so they leave out a lot of nuance. The Institute for Justice’s report does add some nuance, reporting that by its standard of measure, Oklahoma ranks 18 th in how burdensome are its licensing laws. That is an important piece of information. On the one hand, according to the Institute for Justice, Oklahoma’s licensing laws cover fewer occupations than in ma...
Read more