Trucking groups joined with AAA and other organizations last month to form a new coalition opposed to the privatization or leasing of existing toll facilities to private investors. Coincidentally or not, the announcement came the same week that the Bush Administration issued new projections showing that federal aid for highway construction may have to be scaled back within two years. In other words, the highway-user groups were just saying “no” to the most likely alternative to a construction cutback.
ATA, OOIDA, NATSO and others sent a letter to Dept. of Transportation Secretary Mary Peters asserting that sale or lease of existing toll facilities “carries potential negative impacts on highway safety, security and the motoring public.”
Meanwhile, the Administration put forth a budget for fiscal-year 2008, starting October 1, 2007, that would trim the expansion of highway spending President Bush agreed to in August 2005 when he signed the highway bill known as SAFETEA-LU.
The bill assumed a certain level of revenues and spending each year through fiscal 2009. But it also specified that whenever highway tax collections exceed the anticipated amount, the excess would be sent to the states rather than retained in the federal treasury.
Trust fund receipts so far have exceeded the estimates of two years ago, partly because truck buyers went on a shopping spree in 2006 that brought in higher-than-expected revenues.
The President's budget asks that Congress change the law to end this adjustment. Even with this change, the Administration projects that the highway account of the trust fund won't collect enough in the following fiscal year to cover SAFETEA-LU spending. Persistently high gasoline prices have led motorists to buy more fuel-efficient vehicles, use carpools and transit more, and eliminate some discretionary travel. Thus, gas tax receipts, the mainstay of federal and state trust funds, are now expected to grow less rapidly through 2009 than had been projected when SAFETEA-LU was enacted.
If the Administration's forecast proves accurate, the feds would scale back the checks they send to the states. It's not as if SAFETEA-LU authorized excessive highway construction spending. On the contrary, the legislation approved a spending total tens of billions of dollars below what DOT had said was needed to maintain 2002 levels of congestion and pavement condition, let alone generate improvements.
Congress has shown no willingness to raise tax rates or put new revenues into highways. Legislatures and governors in most states have proven equally reluctant to increase state taxes for highway construction. That leaves private funding as the only alternative.
The two examples to date of highway privatization show why road users shouldn't be hasty to oppose it. Both the $1.8-billion lease of the Chicago Skyway and the $3.8-billion lease of the Indiana Toll Road have led to quicker improvements in those roads than before.
The difference between the two leases is instructive. Indiana's governor and legislature insisted that the money that state gained be dedicated to highway projects, while the city of Chicago did not. As a result, the money Indiana reaped has led to an enormous acceleration of the state's road-building program. In contrast, Chicago may see little or no addition to road capacity elsewhere in the city from its bounty.
The bottom line: Highway-user groups can play a useful role in getting legislatures and city councils to write appropriate privatization agreements. But the groups need to speak up, not stick their heads into the pavement.