Kentucky Sen. Max Wise, R-District 16, has been one of the strongest advocates for passage of legislation to allow public-private partnerships in Kentucky. He was a sponsor of the original legislation that passed in 2016 and helped drive legislation in 2017 to update the Commonwealth’s P3 laws. Wise answered these questions for P3 Kentucky.
Why are public-private partnerships important for building Kentucky’s infrastructure?
Who better to assist in infrastructure projects than the private sector. They have been doing such projects with guidance and expertise for years. Our state is in a revenue shortfall and the partnerships that we are forming with P3 models can provide our state with some excellent financing projects.
What kinds of infrastructure projects do you expect to see in the next two years using Kentucky’s new P3 law?
I think that our parks and recreation sector is going to see a major overhaul and renovation with P3 projects. This could potentially be our state parks system, the Louisville Fairgrounds, various rest stops on the interstate. I think you will see some excellent proposals coming forward to enhance our state’s tourism engine.
What kinds of infrastructure projects do you think cities, counties and local districts in particular will pursue using P3?
Most likely I think these will be building renovations coupled with infrastructure projects such as water & sewer line enhancements. I think our smaller communities are still learning about P3 and at first could he hesitant to go the P3 route. However, I do believe that your medium to larger urban areas are going to moving ahead with guidance and a vision to enter into a P3 financing model.
Why should local officials consider P3 financing as an alternative to traditional bonding?
I think it is another source of financing that can be readily available and responsible when it comes to saving taxpayer dollars and not entering into a long-term investment that could require decades of financing. We included a large level of transparency in this bill to protect our local governments from not getting in over their heads with a project.
What’s the biggest myth or misconception about P3 financing?
That P3 is a funding mechanism that the state or federal government is just handing out money. P3 is simply another financing tool to assist all levels of government and bringing together expertise of the private and public sector together to add another tool in the tool chest.
How do you think tax reform efforts might help local governments with infrastructure investments?
I am excited to see what the federal government plans to do with tax reform and how P3s may be utilized more. In his inaugural State of the Union address, President Trump mentioned public-private partnerships and his vision for the United States. This is exciting. I think you will see Kentucky making a big splash with P3 projects in the next 12 to 15 months. Our legislation is already a model that other states are copying and looking at. I am speaking on a P3 steering panel in Boston this August at the National Council of State Legislatures Conference about the work we have done in Kentucky with respect to P3 legislation. I am very excited about what is in store for this state.
What advice do you have for local officials who might be considering pursuing P3 projects?
Be educated. Seek advice. Discuss what projects are both economically possible for your community and which are of the most importance to your local government and citizens. P3 may not be the best tool for you, but it is another option that wasn’t there before.