Posted on 05/23/2017 1:09:11 AM PDT by Tolerance Sucks Rocks
This week, while Donald Trump ensnares himself in the most serious threat to his presidency to date, Congress is, to some extent, continuing with the typical business of government. A series of hearings during “Infrastructure Week” are focusing on the administration’s rumored infrastructure plan.
Although the White House has been talking up private infrastructure investment as a replacement for public funding, a panel of experts told Congress that, even with perfectly executed public-private partnerships, the federal government still needs to provide its own support — especially for projects, like transit lines, that aren’t guaranteed to generate toll revenue for profit-seeking investors.
This morning, Transportation Secretary Elaine Chao appeared before the Senate’s Environment and Public Works committee. Chao didn’t reveal much, but she did say that the White House will release a statement of “principles” about infrastructure later this month before handing off an actual infrastructure plan to Congress sometime later this summer.
Whether that’s actually going to happen is anybody’s guess. So far, the administration has given two substantive clues about its infrastructure agenda. One is a budget proposal that guts transit programs. The other is a campaign white paper that recommends using tax cuts to promote private financing of public infrastructure projects.
While Chao was circumspect, both topics got airtime at a Senate subcommittee hearing yesterday, where a panel of experts weighed in with advice on privately financing infrastructure.
Public-private partnerships have a role, said Virginia Transportation Secretary Aubrey L. Lane, but they are not a silver bullet that allows taxpayers to get something for nothing. The public pays for infrastructure one way or another, whether through tolls, taxes, fares, or fees, and it’s up to the government to make sure taxpayers are getting the best deal possible.
Virginia’s state DOT has done five public-private partnerships since 2007 — all for tolled highway expansions. For HOT lane construction on Interstate 66, Lane said, VDOT modeled how it would pay for the project using public financing before asking the private sector if it could come up with a better solution. That way, the state had a fallback position during negotiations with private firms.
Not every state has the know-how to navigate these complex negotiations. And not every project is going to generate the profits that will attract interest from the private sector. In fact, there are just 42 public-private surface transportation projects in the entire United States, according to FHWA statistics Lane cited. There are 35 states that have never had a single public-private transportation project.
With so much talk about promoting public-private partnerships coming out of the Trump administration and Congress, Lane is concerned that federal incentives could tilt the playing field to private financing, even if it isn’t the best deal for taxpayers. “Many of these concepts would provide an incentive that is only available if a project is financed privately,” Lane said in his testimony. “This creates distortions in procurements that will undercut the public’s negotiating position.”
Even with an expertly negotiated public-private deal, transportation projects ultimately require taxpayer dollars.
Los Angeles Mayor Eric Garcetti, who chairs the U.S. Conference of Mayors’ newly-formed infrastructure task force, said that means pairing dollars raised locally, like with the multi-modal Measure M ballot initiative in Los Angeles, with a reliable source of federal funds. “In the election in November, when everyone was focused on the presidential election, in cities throughout America, $230 billion in infrastructure initiatives were approved by voters,” Garcetti testified, referring to ballot initiatives that primarily fund transit. He added later: “Could we have our federal tax dollars along with our local tax dollars to make this happen?”
Supporters of urban transit like Garcetti weren’t the only ones looking for a reliable partner in the federal government. “Long-term, consistent federal funding remains vital,” testified Tim Gatz, executive director of the Oklahoma Turnpike Authority. “States must be able to anticipate the availability of resources in order to plan, design, and build projects.”
“The binding constraint facing state and local governments is insufficient tax revenue. Public-private partnerships and investor tax credits do not solve this problem,” Kevin DeGood, director of infrastructure policy at the Center for American Progress, told the subcommittee. “There are no shortcuts to rebuilding America’s infrastructure.”
Money losing govt transportation projects are not the way to go either. This website seems to prefer those. They show the photo of the VA fast lane moving while the other lanes are stalled. EZ pass was like that, too, when it started in the Northeast.
Considering that the highway is wide enough to expand to at least 5 lanes in each direction (probably 7 lanes, actually), there were other options besides jamming all the traffic as shown, with the option of paying a dollar per mile to be in the middle.
Agreed—both are losers for the US.
Public-private partnerships are crony giveaways.
The question is whether such an arrangement for transportation infrastructure project can ever really be implemented effectively. I'm not so sure about it, and the article doesn't address the biggest flaw in these arrangements: they tend to have a hard time attracting investment because are usually terrible investments for the private sector.
If a transit line is not generating revenue it means that people in a free democracy are voting with their feet and with their money for other alternatives.
Can we allow people to vote the wrong way with their feet? and with their money?
Should voting be limited to voting for the politicians?
Should the academics who have developed the perfect models of human movement not be allowed to engineer the movement of people who vote against their own best interest?
That’s not necessarily so bad, but the privatization of roads is criminal.
It's basically Fascism.
There is a high-speed tollway in the Austin, TX area that opened to big publicity as a private/public deal. Now it has gone bankrupt in just a few years. However, these things keep being agreed to.
Yep—corporatism.
Much like the announcement this week of the Saudis putting tens of billions into an infrastructure fund run by the head of Trump’s business advisory council.
(Or, for that matter, the Saudi’s and UAE putting $100M into the president’s daughter’s pet fund at the WB after her husband strong-armed a $100M break for them from the private company they are buying weapons from.)
Tolls.. that’s like taking the milk carton back and paying full price after you pour a glass, and the next glass,until it is gone. How about despising of unions and crony bidding. Live within your means government.
Yes, simply removing unions from government contracts and employment would save enough to make this easily “affordable”—though of course a massive shrinkage of government is in order too.
On that note, I will say I very much like Trump’s budget priorities of getting illegals off the dole (though I’d get them out of the country pronto too) and adding more work requirements for the able bodied.
The GOP as a party is of course totally exposed now, as they’ve gone from “we can’t cut anything because Obama won’t approve it” to “Trump can’t cut anything because we won’t approve it!”
Toll roads fail because after they are paid off, the tax remains. Imagine after your last house paymemt, you still gots bills.
Scam.
Additional number of highway lanes fail because it creates incentive to build tall apartment buildings, clogging the new highway. Now instead of 4 clogged lanes you have 8.
Monopoly, you cannot win. The Government club, you ain’t in it.
Toll roads are a scam whether in private or public sector hands. The Mass Turnpike was supposed to be paid off decades ago. Now that two terms of the liberal Democrat Gov. Malloy has brought CT to its knees they are talking about bringing tolls back to route 95, which is also a critical local road for poor working stiffs.
If one looks at public transportation investment as a way of paying other people to ride a train or bus so that I can drive my car in less traffic, it becomes more palatable, to me at least.
Wait.. illegals off the dole? Didn’t he say a few weeks ago that dreamers need not worry. He is proposing amnesty, on some level. So that magic means non illegals on the dole, because they wouldn’t want to worry dreamers.
Of course, being illegal means paying no taxes, i have to say it literally pays to be illegal. Imagine your bank account if you had 20 years of untaxed income.
Oh, I so agree—get them all out of here!
(The national GNP would take a dip, but be spread among far fewer—and those it belongs to.)
Express lanes or no express lanes, they should add another free lane to I-95 in each direction from Va. 123 to the 95/295 split just north of Richmond. Of course, now VDOT will have to pay some additional money to Transurban to do that, due to supposed resulting loss of toll revenue in the express lanes.
Dang, don’t YOU sound like an arrogant lib! :-D
It’s the Toll 130 extension that runs through the boonies between Mustang Ridge and Seguin, TX. Because this PPP runs through the boonies, instead of a heavily populated area, it did not attract enough users to pay its debt.
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