The Federal Highway Administration (FHWA) on Friday announced the creation of a new office whose primary goal will be to lobby state governments to convert their freeways into toll roads. While some congressional leaders expressed hope that the change represented by FHWA’s new Office of Innovative Program Delivery would be reversed by the next administration, there is reason to believe that the incoming administration will continue supporting public private partnership (PPP) initiatives. For now, the toll road promotion office sits at the top of FHWA’s organizational chart to emphasize its primary place within the federal transportation department.
“The Director of Innovative Program Delivery provides advice, guidance, and research support related to tolling and pricing initiatives and administers tolling authorities,” Transportation Secretary Mary E. Peters wrote. “[The office also] promotes the development and use of techniques associated with providing transportation in terms of innovative and non‑traditional funding sources, innovative contractual processes, and changing roles and responsibilities involved in designing, constructing, operating, maintaining, financing, obtaining, and procuring highway facilities.”
These “innovative and non-traditional” funding mechanisms have caused concern among local and federal representatives in the wake of the ongoing financial crisis. U.S. House Transportation Committee Chairman James L. Oberstar (D) and Highways Subcommittee Chairman Peter A. DeFazio (D) yesterday wrote to Secretary Peters to oppose the single-minded focus on tolling.
“The financial crisis and the tightening of credit markets have raised serious questions over the governance structure and financial viability of firms involved in a number of PPPs,” Oberstar and DeFazio wrote. “The dependence of these firms on debt and asset inflation rather than income or cash flows to finance acquisitions and pay dividends to shareholders has raised questions concerning the sustainability of this model. It also highlights the risks and consequences of rushing into long-term deals that are not structured appropriately or do not contain sufficient contingencies to address unanticipated crisis.”
The two chairmen attempted in their election day letter to pin the blame President George W. Bush (R) for the excessive emphasis on tolling.
“The Bush administration’s rush to embrace and promote PPPs and other innovative financing arrangements may hurt future efforts to positively harness private investment and innovation for the public good,” the congressional leaders wrote.
This, however, is the same type of arrangement called for in the Infrastructure Bank Act that is a key part of the agenda of President-elect Barack Obama (D). Obama hopes to establish the bank to provide $60b for infrastructure projects with “a preference for projects which leverage private financing, including public-private partnerships” (view details). Moreover, in March, Senator Obama endorsed New York City Mayor Michael Bloomberg’s idea to charge a $9 toll on cars and a $22 toll for trucks that enter downtown Manhattan during working hours.
“I think Mayor Bloomberg’s proposal for congestion pricing is a thoughtful and innovative approach to the problem,” Obama told WNYC radio in March. “The basic notion that we should do what we can to reduce congestion, to reduce pollution, to reduce consumption of foreign oil and to then to reinvest dollars into our infrastructure in mass transit.”
[Click here to read the Oberstar-DeFazio letter to DOT Sec. Mary Peters]
I’ll at least feel good knowing people like Peggy Joseph will be able to pay her gas and mortgage
I really think trying to raise revenue from the local population is a no-win game.
* Can’t get elected if you are going to raise income taxes
* Gas tax? People drive less
* Toll road taxes? People will drive less
* Real estate taxes? No need to comment…real estate is in the crapper
I think politicians REALLY need to understand you can’t get blood from a stone. Perhaps they should _SPEND LESS_
Politicians are approaching the problem of “not enough money to pay for services” from only one possible standpoint — raise more money (as opposed to also cutting unnecessary services).
Then again, our tolls are jokes compared to most nations. I went (driving) with some friends from Mexico from Guadalajara to Puerto Vallarta, and in a 4 hour drive I think we paid 4 tolls averaging about $10 each.
Brazil is similar.
Cough. I think the headline should be “Mary Peters is so stupid that she thinks sucking up to bankrupt highway infrastructure firms in the last month of the Bush administration is going to get her a high paying private gig”.
I can understand how using a private company to BUILD a new toll highway makes sense; how is possible to transfer an existing highway to a private company without some massive corruption taking place.
Given that 90% of what we need in better secondary roads and improved maintenance of existing highways, I don’t see toll roads having a bright future.
I recognize that our country’s infrastructure is sadly in need of R&R but I don’t see it as a shortage of cash but as a question of how the money that they do have is being spent.
When I was a kid the gov’t drove the plainest of vehicles, worked in the plainest of offices with the steel and wood office furniture that would last at a minimum of 100 years. Now I see them living pretty good these days – vehicles that rivals what I drive everyday (loaded) and offices with recent furniture and new computers every 3 years or less.
I don’t mind pay to keep our country in repair but I don’t want to be gouged.
The cost of pensions and health care, that is typically far superior to that of the commoners laboring in the private sector, has to have a BIG impact on the tax money left over to actually get done what needs getting done (such as highway maintenance).
Then again, our tolls are jokes compared to most nations. I went (driving) with some friends from Mexico from Guadalajara to Puerto Vallarta, and in a 4 hour drive I think we paid 4 tolls averaging about $10 each.
Yet in Canada and many parts of western Europe this doesn’t happen: toll roads are relatively few, and yet roads are in reasonable repair compared to American equivalents. The reason is that those have reasonable gas taxes and don’t fritter away their tax revenues through overadministration.
And of course the revenue won’t be used for other things like pension plans. Oh wait, that was the goal of tolling I-80 in PA, to supplement the costs of public transportation in Philly. I-80 goes nowhere near Philly and it isn’t like the drivers on I-80 could take the bus instead.
Corazine wants the NJ turnpike to cost 9 dollars an exit, 125 round trip from top to bottom, to fund a 75 billion dollar public spending spree.
This is just the start. Wait until they track your car and charge you for every road you drive on.
Hey, toll roads are based on the principles of “user pays” and “pay as you go.” Doesn’t that violate my constitutional rights as an American citizen?
joeaverage: “When I was a kid the gov’t drove the plainest of vehicles, worked in the plainest of offices with the steel and wood office furniture that would last at a minimum of 100 years.”
My wife’s genealogical research takes us into old rural courthouses. I’m always impressed by the heavy steel cabinets and super-sturdy oak furniture that must have been bought before the Eisenhower administration, but is still perfectly fine for the purpose. And at the agency I worked for until my recent retirement, we were always delighted when we could score some vault-like military-surplus 30 or 40 year old filing cabinets, instead of having to buy the flimsy tin boxes now on the market.
GS650G: “This is just the start. Wait until they track your car and charge you for every road you drive on.”
They already do. It’s called the gas tax. The problem, from government’s point of view, is that voters don’t want to pay European levels of fuel taxes.
I’m actually agreeing with psarhjinian, though it appears that I come from the opposite end of the political spectrum. At the risk of being stoned, I work for a government agency, the Health Department, and I can testify to the fact that I personally could get literally ten times as much work done if it weren’t for the bosses proverbally looking over my shoulder and reviewing, questioning, and picking apart every little thing that I and everybody else does here. They’re all so afraid that someone will make a mistake, due to the mistakes of a few (who evidently can’t be fired), that everybody is wrapped up in red tape. The funny thing is that mistakes still happen, it seems that it’s only the actual work, protection of public health, that is prevented. I don’t know about other offices, but our equipment is outdated. It’s gold-plated priced but garbage quality. Why? Because we are required to support government cronies in our purchasing, which is centrally controlled to prevent improper use of funds by field offices. For instance, for the price we pay for IT support, I could get a new, top-of-the-line, computer every year with a great service from a private provider. What do I get? “Sorry, we don’t have time to take car of that right now; we’ll get to it when we can.” And, a computer that is six year old technology at best. People who think that increased government involvement will reduce costs and improve service have never seen big government from the inside.
Wait a minute…hasn’t my tax dollar already paid for any current interstate highway? And now they are going to charge me to drive on what I already paid for? Hmmm…enjoy Obama, everyone.