Toll Roads Hit Speed Bumps
By Eric Kelderman
In 2006, Indiana Gov. Mitch Daniels (R) triggered a toll-way mania when he signed a whopping $3.8 billion deal to lease the 157-mile Indiana Toll Road to a private investment firm for 75 years.
But this year, public and political opposition forced Daniels to shelve two smaller proposals for privately built and managed toll roads in the Hoosier State.
Daniels is not the only governor whose transportation funding plans are being detoured. As states increasingly look to toll roads and public-private partnerships for quick road-funding fixes, the public, consumer advocates and motorist and trucking associations are putting up barriers to pay-as-you-drive proposals.
Grassroots activists and state legislators are trying to put the brakes on plans by Texas Gov. Rick Perry (R) for a 4,000-mile network of toll roads. Democratic Gov. Ed Rendell’s initiative to lease the Pennsylvania Turnpike was instantly panned by the state Turnpike Authority and union workers who operate toll booths on that road. A majority of New Jersey residents oppose Democratic Gov. Jon Corzine’s idea to lease the Garden State Parkway to cut the state’s debt or lower property taxes, according to a January poll .
In 2006, Colorado residents persuaded lawmakers to bar private companies from using eminent domain to claim land for road projects – a measure aimed at killing a 210-mile toll road across the state’s eastern plains.
Adding tolls to an existing road is just a way of hitting up taxpayers a second time for a stretch of highway, argues Clayton Boyce, a spokesman for the American Trucking Associations (ATA). Moreover, private companies may compromise on road maintenance to boost profits in these ventures, said Boyce, whose organization has joined forces with five other groups to discourage privatization of roads nationally.
The growing opposition to tolling and privately leased roads is part of a bigger dilemma for states: How to pay for fixing the nation’s aging and overcrowded highways and Interstates.
The federal gas tax of 18.4 cents per gallon, which pays for more than 45 percent of the nation’s transportation infrastructure, has not been raised since 1993 and will fall $11 billion short of planned road projects by 2009, according to a new report by the American Association of State Highway and Transportation Officials (AASHTO). At the same time, the cost of building and repairing roads is skyrocketing: Between the last gas-tax hike in 1993 and 2015, construction costs will have increased by more than 70 percent, the report stated.
To bridge some of the road-funding gap, states are fast turning to toll roads and considering leasing those roadways to private companies in exchange for cash up-front to build more infrastructure.
In 2005, tolling earned $7.7 billion, which was 5 percent of highway revenues nationally, AASHTO reported. Tolling could increase to 9 percent of highway funds over the next decade, according to the organization’s estimates.
Robert Poole, of libertarian Reason Foundation , favors leases over raising the gas tax to fund road projects. He says there’s a greater value to leasing deals because public-private partnerships provide big lump sums of money that can pay for other large state projects. By comparison, gas taxes trickle back to the states in smaller amounts.
Daniels’ 2006 deal to lease the Indiana Toll Road is earning about $6 in interest every second to pay for a host of future highway projects. The governor’s scuttled proposal to allow a private firm to build and operate a $1 billion bypass around Indianapolis would have helped pay for a new 142-mile Interstate linking the state capital and Evansville, Ind.
But the Indiana Toll Road agreement was unpopular with residents and only narrowly was approved by a Republican-controlled Legislature last year. The controversy helped Democrats win a majority in the state House of Representatives in the 2006 elections.
Rendell has said that leasing the Pennsylvania Turnpike could be worth as much as $30 billion, giving the state $1.7 billion immediately and as much as $965 million annually for transportation.
However, the Pennsylvania Turnpike Authority , a state agency that operates the state’s 67-year old toll road, has launched a campaign to counter Rendell’s plan and recommends greater borrowing and a new tolling scheme to boost revenues. AAA Mid-Atlantic also opposes leasing the toll road and released a March poll that showed 70 percent of drivers agreed.
A Quinnipiac University poll , however, found 49 percent approved of leasing the turnpike if the state has control over toll prices and maintenance, with 41 percent opposed.
“The governor has said he will not make any deal that is not in the best interest of the state. He’s not giving up control of the roads or the workers,” said Rendell spokesman Barry Ciccocioppo.
In Texas, the state Senate is considering several bills to scuttle public-private partnerships for toll roads. The most recent action is a measure, attached to the chamber’s version of a must-pass state budget, that would give the state’s five-member Budget Board oversight of any public-private road partnerships in an attempt to block Perry’s plans.