NTU Welcomes Reintroduction of Legislation to Expand Public-Private Partnerships

Last week a bipartisan group of Senators reintroduced the Public Buildings Renewal Act, sensible legislation that would encourage public-private partnerships (PPPs) to rebuild outdated government-owned facilities. This innovative yet practical proposal will harness the expertise of the private sector in ensuring cost-effective construction of schools, hospitals, and other government structures. Taxpayers, businesses, and governments at all levels would all win from these PPPs. NTU applauds Senators Young (R-IN) and Cortez Masto (D-NV) for again championing this legislation in the Senate.

Reintroduction of PBRA is timely due to a potential large scale infrastructure package that may move through Congress by the end of the summer. In recent weeks, many different stakeholders including president Biden, Senate Republicans, and the moderate “Problem-Solvers Caucus” have each unveiled their own plan on what would be built and how it would be paid for. Unlocking our nation’s infrastructure potential is more important than ever, and we believe that given the cost-effective components of PBRA, it should absolutely be included in any such package. 

The core component of the Senate version of PBRA is to remove an obstacle standing in the way of more PPP opportunities for government-owned buildings. In the most efficient form of a PPP, a single private consortium is made responsible for designing, building, operating, and maintaining a government structure. The language of the bill would address issues that make financing of building improvements unattractive to investors by adding a carefully defined category of public buildings to the existing 15 categories of infrastructure projects under federal law for qualified private activity bond (PAB) financing.

While PPPs are not ideal for every situation, they can be highly effective when used for the right projects. In fact, these PPPs have proven to save as much as 25 percent over the life-cycle project cost -- a significant savings for taxpayers over the long-term. In essence, it empowers the private sector, which is more efficient and competent, rather than the federal government to restore these buildings.

For several years now, fiscal conservatives have recognized the value that PBRA could have in finally helping to tame the scandalously over-budget, behind-schedule construction schemes in which governments too often become mired. Last year a coalition of free-market groups led by NTU endorsed PBRA, noting that it “has the advantage of transferring the risk of excessive costs or delays from taxpayers to the consortium and its investors” and that “the pressure on state and local property taxes, and on behalf of ill-advised federal assistance schemes for local construction, would be diminished.”

Balancing the needs to update our surface transportation infrastructure, underground infrastructure, and other physical structures must be met with the fiscal realities we face as a country. Every American wants state-of-the-art schools, hospitals, and public libraries, but how we pay for these popular items is always a tricky situation. But with PBRA and the private sector, we can build more of these types of buildings at a more affordable and effective rate than we can through the status quo. Whether passed as a stand-alone legislation, as an amendment, or tucked into an infrastructure bill, PBRA can help America’s infrastructure move forward.