Owning roads?
10-29-07, 08:33 PM
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Owning roads?
What do you think about this commuting phenomenon?
Pennsylvanians had been clamoring for a new road between Philadelphia and Lancaster for years, but the government just couldn't afford it. So in 1792 the state chartered a company that would build the nation's first private turnpike--62 miles (100 km) of stone and gravel--in exchange for the right to collect tolls. Today Pennsylvania finds itself in a similar bind, with the money it needs for roads and bridges far outstripping the money it gets from the gas tax and other revenue streams. So Governor Ed Rendell is turning back the clock, proposing a slew of deals with the private sector, starting with a long-term lease of the 359-mile (578 km) Pennsylvania Turnpike, which could bring the state an estimated $12 billion to $18 billion up front. "We have to be as creative as heck to get out there and fund our infrastructure needs," says Rendell.
For states and cities looking to upgrade or replace aging infrastructure, partnering with private players is the biggest idea to come along since the interstate highway system started ribboning the country with asphalt in the 1950s. The appeal: governments can stop worrying about roads, bridges and tunnels, and companies get lucrative leases that allow them to collect money from drivers for generations. The craze is being driven by investors who crave the steady cash flow of decades' worth of tolls. There are 71 projects worth $104 billion being considered for private development by state and local governments, according to the publication Public Works Financing. The proposals are feeding a new pack of investment funds from the likes of Goldman Sachs, Morgan Stanley and the Carlyle Group--as well as controversy over how roads should be paid for.
The deals, common in Europe for decades, got jump-started in the U.S. in 2005 when Chicago enriched its treasury by $1.8 billion by selling a 99-year lease of the Chicago Skyway to Spanish roads operator Cintra and Australian bank Macquarie. At about the same time, Texas bagged $1.2 billion to let a Cintra-led consortium build the first part of the Trans-Texas Corridor and collect tolls on it for 50 years. In 2006 Indiana signed a 75-year lease for the 157-mile (253 km) Indiana Toll Road in exchange for $3.8 billion, funding the state's transportation needs for the next decade--and grabbing the attention of other budget-conscious states. "It was an earthquake in transportation," says Bob Poole, director of transportation studies at the Reason Foundation, a think tank.
But since the spring, a backlash has taken hold. Texas, a pioneer in privatization under the enthusiastic leadership of Governor Rick Perry, saw its legislature impose a two-year moratorium on new projects. The Pennsylvania legislature bounced Rendell's first attempt to privatize the turnpike, though now he's trying again in the wake of shifting state politics. The mother of all toll roads, the New Jersey Turnpike, is under review, but Governor Jon Corzine, a former Goldman chairman, disappointed eager bankers in June when he flatly stated, "We're not going to privatize."
The issue exploded last May when a letter was sent by the House Transportation Committee's James Oberstar of Minnesota and Peter DeFazio of Oregon to all 50 Governors, expressing concern that a flood of local deals might put "parochial and private interests" ahead of an "integrated national transportation network"--and threatening to undo any deals found not to be in the public's interest. That's pointedly at odds with the Department of Transportation (dot), which, following the lead of the Bush Administration, has been a huge supporter of privatization and helped pave the way by letting some companies issue debt with the same tax advantages as municipal bonds. The dot also drafted model legislation for states considering deals and in at least one case--when Texas backed off a deal with Cintra--threatened to withhold funds.
So what's not to love? The most common gripe is populist. Tolls often skyrocket under private owners, though with the blessing of elected officials, who avoid the political costs of raising tolls or taxes themselves. That's how privatized roads deliver double-digit returns for investors and often lead to upgrades like electronic tolling. But there are other devils lurking in the details, like noncompete clauses that may prevent transportation agencies from building new roads, or the inability to use roads for economic development by, say, adding a new exit to attract businesses. Some officials get queasy about locking themselves into long leases; Colorado officials already regret offering a 99-year lease for the Northwest Parkway. Others are turned off by the hard sell from investment bankers who advise states on some deals and bid on others. "This should be the last option," says Texas state senator John Carona, "not the first."
At the core of the debate is a fundamental issue: Is building roads one of those things, like trade policy, that only the Federal Government should steer, or is there a better way? Forty-five percent of the money spent on American roads comes to the states from the Federal Government, but Congress hasn't raised the gas tax, its main source of highway funds, since 1993. And that's just fine by people who find the free market efficient and earmark-free.
The debate is more than philosophical. Even before the recent Minnesota bridge collapse, commuters in crowded corridors from Atlanta to northern Virginia knew that our infrastructure needed investment and that capacity hadn't kept pace with demand. It hasn't helped that many state politicians have been just as reluctant as Congress to raise gas taxes. Or that thanks to the surging price of materials like petroleum and steel, the cost to build highways has jumped 43% since the beginning of 2004.
Money from the private sector could help fill that gap, but there is more than one way to get it. Deals like the Chicago Skyway and Indiana Toll Road, which lease existing assets, may tap the private sector's operating prowess and political immunity in raising tolls, but critics see them as long-term mortgages to solve short-term fiscal problems. "People are giving public-private partnership a bad name by running around the countryside trying to entice cash-strapped states and municipalities to participate in these monetizations," says Tim Carson, vice chairman of the Pennsylvania Turnpike commission and a public-finance lawyer.
Carson argues that the public sector can wring plenty of cash out of toll roads by essentially behaving like the private sector and charging market rates for usage. The express lanes of State Road 91 in Southern California, for example, carry some of the highest tolls in the nation--at peak hours, nearly a dollar a mile--which may annoy drivers but help pay for the state's transportation needs. The Pennsylvania Turnpike commission has produced a plan to raise turnpike tolls and attach tolls to other roads in the state.
Deals in which the private sector actually builds new infrastructure are usually a better bargain for the public. The state or city gets a new stretch of highway or a bridge or a tunnel, and it shifts risk to its private partner--a genuine benefit. If construction costs spike or expected traffic doesn't materialize, that's the company's problem. "We've had some governments say to us, 'I don't really need to be in that business,'" says Mark Florian, who oversees infrastructure deals for Goldman Sachs. These so-called greenfield projects are starting to catch on. And some states are getting savvy about how to structure the terms. The 50-year lease for Texas' State Highway 130, for example, includes a revenue-sharing clause that nets the state 4.6% of gross receipts at first and up to 50% as traffic increases--just in case the road proves more valuable than predicted.
And even though 2007 has placed a few speed bumps in their way, public-private partnerships are almost certainly here to stay. Many of the financiers who run infrastructure funds actively drum up deals--some states allow unsolicited bids, and bankers have fanned across the country in response--and the big global players in infrastructure have set up shop too. Worldwide, somewhere from $50 billion to $150 billion worth of equity is waiting to be invested in infrastructure of all stripes (including assets like airports and water systems), and much of that is trained on the U.S. "U.S. infrastructure needs lots and lots of capital, and it's not obvious where all that money is going to come from," says Murray Bleach, who runs U.S. operations for Macquarie. "The potential is huge." With all that cash waiting in the wings, other concerns may not stand a chance.
For states and cities looking to upgrade or replace aging infrastructure, partnering with private players is the biggest idea to come along since the interstate highway system started ribboning the country with asphalt in the 1950s. The appeal: governments can stop worrying about roads, bridges and tunnels, and companies get lucrative leases that allow them to collect money from drivers for generations. The craze is being driven by investors who crave the steady cash flow of decades' worth of tolls. There are 71 projects worth $104 billion being considered for private development by state and local governments, according to the publication Public Works Financing. The proposals are feeding a new pack of investment funds from the likes of Goldman Sachs, Morgan Stanley and the Carlyle Group--as well as controversy over how roads should be paid for.
The deals, common in Europe for decades, got jump-started in the U.S. in 2005 when Chicago enriched its treasury by $1.8 billion by selling a 99-year lease of the Chicago Skyway to Spanish roads operator Cintra and Australian bank Macquarie. At about the same time, Texas bagged $1.2 billion to let a Cintra-led consortium build the first part of the Trans-Texas Corridor and collect tolls on it for 50 years. In 2006 Indiana signed a 75-year lease for the 157-mile (253 km) Indiana Toll Road in exchange for $3.8 billion, funding the state's transportation needs for the next decade--and grabbing the attention of other budget-conscious states. "It was an earthquake in transportation," says Bob Poole, director of transportation studies at the Reason Foundation, a think tank.
But since the spring, a backlash has taken hold. Texas, a pioneer in privatization under the enthusiastic leadership of Governor Rick Perry, saw its legislature impose a two-year moratorium on new projects. The Pennsylvania legislature bounced Rendell's first attempt to privatize the turnpike, though now he's trying again in the wake of shifting state politics. The mother of all toll roads, the New Jersey Turnpike, is under review, but Governor Jon Corzine, a former Goldman chairman, disappointed eager bankers in June when he flatly stated, "We're not going to privatize."
The issue exploded last May when a letter was sent by the House Transportation Committee's James Oberstar of Minnesota and Peter DeFazio of Oregon to all 50 Governors, expressing concern that a flood of local deals might put "parochial and private interests" ahead of an "integrated national transportation network"--and threatening to undo any deals found not to be in the public's interest. That's pointedly at odds with the Department of Transportation (dot), which, following the lead of the Bush Administration, has been a huge supporter of privatization and helped pave the way by letting some companies issue debt with the same tax advantages as municipal bonds. The dot also drafted model legislation for states considering deals and in at least one case--when Texas backed off a deal with Cintra--threatened to withhold funds.
So what's not to love? The most common gripe is populist. Tolls often skyrocket under private owners, though with the blessing of elected officials, who avoid the political costs of raising tolls or taxes themselves. That's how privatized roads deliver double-digit returns for investors and often lead to upgrades like electronic tolling. But there are other devils lurking in the details, like noncompete clauses that may prevent transportation agencies from building new roads, or the inability to use roads for economic development by, say, adding a new exit to attract businesses. Some officials get queasy about locking themselves into long leases; Colorado officials already regret offering a 99-year lease for the Northwest Parkway. Others are turned off by the hard sell from investment bankers who advise states on some deals and bid on others. "This should be the last option," says Texas state senator John Carona, "not the first."
At the core of the debate is a fundamental issue: Is building roads one of those things, like trade policy, that only the Federal Government should steer, or is there a better way? Forty-five percent of the money spent on American roads comes to the states from the Federal Government, but Congress hasn't raised the gas tax, its main source of highway funds, since 1993. And that's just fine by people who find the free market efficient and earmark-free.
The debate is more than philosophical. Even before the recent Minnesota bridge collapse, commuters in crowded corridors from Atlanta to northern Virginia knew that our infrastructure needed investment and that capacity hadn't kept pace with demand. It hasn't helped that many state politicians have been just as reluctant as Congress to raise gas taxes. Or that thanks to the surging price of materials like petroleum and steel, the cost to build highways has jumped 43% since the beginning of 2004.
Money from the private sector could help fill that gap, but there is more than one way to get it. Deals like the Chicago Skyway and Indiana Toll Road, which lease existing assets, may tap the private sector's operating prowess and political immunity in raising tolls, but critics see them as long-term mortgages to solve short-term fiscal problems. "People are giving public-private partnership a bad name by running around the countryside trying to entice cash-strapped states and municipalities to participate in these monetizations," says Tim Carson, vice chairman of the Pennsylvania Turnpike commission and a public-finance lawyer.
Carson argues that the public sector can wring plenty of cash out of toll roads by essentially behaving like the private sector and charging market rates for usage. The express lanes of State Road 91 in Southern California, for example, carry some of the highest tolls in the nation--at peak hours, nearly a dollar a mile--which may annoy drivers but help pay for the state's transportation needs. The Pennsylvania Turnpike commission has produced a plan to raise turnpike tolls and attach tolls to other roads in the state.
Deals in which the private sector actually builds new infrastructure are usually a better bargain for the public. The state or city gets a new stretch of highway or a bridge or a tunnel, and it shifts risk to its private partner--a genuine benefit. If construction costs spike or expected traffic doesn't materialize, that's the company's problem. "We've had some governments say to us, 'I don't really need to be in that business,'" says Mark Florian, who oversees infrastructure deals for Goldman Sachs. These so-called greenfield projects are starting to catch on. And some states are getting savvy about how to structure the terms. The 50-year lease for Texas' State Highway 130, for example, includes a revenue-sharing clause that nets the state 4.6% of gross receipts at first and up to 50% as traffic increases--just in case the road proves more valuable than predicted.
And even though 2007 has placed a few speed bumps in their way, public-private partnerships are almost certainly here to stay. Many of the financiers who run infrastructure funds actively drum up deals--some states allow unsolicited bids, and bankers have fanned across the country in response--and the big global players in infrastructure have set up shop too. Worldwide, somewhere from $50 billion to $150 billion worth of equity is waiting to be invested in infrastructure of all stripes (including assets like airports and water systems), and much of that is trained on the U.S. "U.S. infrastructure needs lots and lots of capital, and it's not obvious where all that money is going to come from," says Murray Bleach, who runs U.S. operations for Macquarie. "The potential is huge." With all that cash waiting in the wings, other concerns may not stand a chance.
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10-29-07, 08:55 PM
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From an economic standpoint I'd find it difficult to beleive that a private entity which needs to make aprofit would somehow be more effecient than a public entity, which can operate at cost.
10-29-07, 09:09 PM
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10-29-07, 09:18 PM
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The trouble with private industry is that they frequently care too much about the bottom line. The trouble with government is that they don't care about the bottom line but about getting re-elected and creating more bureaucracy. I find it difficult to believe that any state has too little money for infrastructure. I find it far easier to believe that they have difficulty finding ways to fund all their political promises to lobbyists and their pet projects and still serve the interests of the population.
10-29-07, 09:48 PM
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I don't really want to get into this.
I can easily throw backat you; "why not privatize everything."
Both would pose obvious problems.
The thing is, the advantages of having things private is when there is a truly free market, meaning enough consumers and sellers that none can effectively manipulate the market price. Neither of these are the case with roads. There are too few new roads being built and operated, and the operation is too complex, for there to be more than a handul of companies with the ability to produce and run major roadways. And there is only one customer.
All moving the roadways to the private sctor will do is transfer the costs to another entity (not the government). But the money will not magically appear. Where do you think the private companies wil get the money required to run the roadways? Where does the government get it?
The problem of course is that irresponsible politicians (and irresponsible voters who keep electing them) promise to not raise taxes. When needed spending exceeds revenue, they don't want to be labeled tax raisers, so they privatize, even though it's in no way a good solution.
I can easily throw backat you; "why not privatize everything."
Both would pose obvious problems.
The thing is, the advantages of having things private is when there is a truly free market, meaning enough consumers and sellers that none can effectively manipulate the market price. Neither of these are the case with roads. There are too few new roads being built and operated, and the operation is too complex, for there to be more than a handul of companies with the ability to produce and run major roadways. And there is only one customer.
All moving the roadways to the private sctor will do is transfer the costs to another entity (not the government). But the money will not magically appear. Where do you think the private companies wil get the money required to run the roadways? Where does the government get it?
The problem of course is that irresponsible politicians (and irresponsible voters who keep electing them) promise to not raise taxes. When needed spending exceeds revenue, they don't want to be labeled tax raisers, so they privatize, even though it's in no way a good solution.
Last edited by M_S; 10-29-07 at 09:54 PM.
10-29-07, 10:40 PM
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The public byways should be held as a national trust and should be developed as an general boon to the economy as a whole, not for specific interests.
10-29-07, 10:57 PM
#7
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What would I be able to ride my bike on?
could this possibly back fire and I'd have to pay a toll just to ride my back down the road in the future? That'd really suck.
Currently I reside in Canada where toll roads tend to be few and far between but what about the future?
I really wouldn't want to have to pay some conglomorate based in Australia for the privilage of riding my bike to work.
could this possibly back fire and I'd have to pay a toll just to ride my back down the road in the future? That'd really suck.
Currently I reside in Canada where toll roads tend to be few and far between but what about the future?
I really wouldn't want to have to pay some conglomorate based in Australia for the privilage of riding my bike to work.
10-30-07, 02:22 AM
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I think an even more pressing question is, that if a private company owned the lease to a road, would they be able to ban bikes, or any other vehicle type, from that road?
10-30-07, 04:02 AM
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I'm a business consultant, working extensively with local government bodies in the UK, and I can tell you that whilst theoretically, they could employ the same number of people, get the same results, but be cheaper because they don't have to make a profit, but in reality, it doesn't work like that. People are paid less, and have less opportunity for promotion. Local government tends not to reward entrepreneurial behaviour, and to promote plodders, very slowly. This means the cream tends to go elsewhere, and those who do work for local government often become jaded and frustrated, and don't put in a lot of effort.
10-30-07, 06:52 AM
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I live on the outskirts of the DC Metro region, and there are two toll roads nearby (for all practical purposes they're the same road). One is owned by the state, and goes from the beltway to Dulles airport, and was supposed to become free once it had paid for itself. Yeah, right. The other, the Greenway, is private, and continues out to the "exurbs."
The Dulles Toll Road will cost you up to $1.25, depending on distance. The other will cost you nearly $4 even if you only ride it a mile. It's priced that way to discourage heavy use, so only those who can afford to throw over $2k a year away in tolls will use it daily. My take on this is that public ownership is for the people, while private ownership is for a profit. With all that we pay in taxes -- and we've got nothing on Canada or the U.K. -- there's no excuse for not being able to maintain the roads. I don't think we need new taxes, just better oversight on where our money is indeed going.
The Dulles Toll Road will cost you up to $1.25, depending on distance. The other will cost you nearly $4 even if you only ride it a mile. It's priced that way to discourage heavy use, so only those who can afford to throw over $2k a year away in tolls will use it daily. My take on this is that public ownership is for the people, while private ownership is for a profit. With all that we pay in taxes -- and we've got nothing on Canada or the U.K. -- there's no excuse for not being able to maintain the roads. I don't think we need new taxes, just better oversight on where our money is indeed going.
10-30-07, 08:21 AM
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What do you think about this commuting phenomenon?
The stretch that was abandoned and turned into a bike trail:
https://en.wikipedia.org/wiki/Abandon...vania_Turnpike
And a stretch that has been considered a 'me too' gift to the western part of the state:
https://en.wikipedia.org/wiki/Pennsylvania_Route_576
10-30-07, 08:43 AM
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I'm a business consultant, working extensively with local government bodies in the UK, and I can tell you that whilst theoretically, they could employ the same number of people, get the same results, but be cheaper because they don't have to make a profit, but in reality, it doesn't work like that. People are paid less, and have less opportunity for promotion. Local government tends not to reward entrepreneurial behaviour, and to promote plodders, very slowly. This means the cream tends to go elsewhere, and those who do work for local government often become jaded and frustrated, and don't put in a lot of effort.
10-30-07, 08:48 AM
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The trouble with private industry is that they frequently care too much about the bottom line. The trouble with government is that they don't care about the bottom line but about getting re-elected and creating more bureaucracy. I find it difficult to believe that any state has too little money for infrastructure. I find it far easier to believe that they have difficulty finding ways to fund all their political promises to lobbyists and their pet projects and still serve the interests of the population.
IMO, this is dead on....absolutely corrct.
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10-30-07, 08:53 AM
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The trouble with private industry is that they frequently care too much about the bottom line. The trouble with government is that they don't care about the bottom line but about getting re-elected and creating more bureaucracy. I find it difficult to believe that any state has too little money for infrastructure. I find it far easier to believe that they have difficulty finding ways to fund all their political promises to lobbyists and their pet projects and still serve the interests of the population.
Remember the only good politician is a dead politician !
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10-30-07, 09:14 AM
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I use a freeway about six times a year, so I'm all for making those private and tolled, especially if it means that the city-county-state will have more money to keep my commuting routes (city streets and central arteries) well repaired and pothole free (There is a dozzie a few hundred feet before the turn off for the MUP that could swallow a bike without a trace).
If a toll road is private do the city buses get a free pass?
Those of you who commute around toll roads though (particularly the super expensive $4+ ones), do you find that the price forces more traffic onto the surface streets? does it drive up the average speed on surface streets?
If a toll road is private do the city buses get a free pass?
Those of you who commute around toll roads though (particularly the super expensive $4+ ones), do you find that the price forces more traffic onto the surface streets? does it drive up the average speed on surface streets?
10-30-07, 09:22 AM
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During rush hour(s) here, you're lucky to average 30 regardless of the speed limit. I'm 10 miles from the office on the MUP and 13 on the streets. I've yet to make the drive faster than I can pedal it.
10-30-07, 09:33 AM
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I hate toll roads. Mostly I hate having to stop at the toll booth and wait in line to pay the toll. They always set it up so the locals can buy RF ID tags that allow them to blow by in the special lane for locals. Out of towner's get to stop and park in line for a while. It really gets my blood pressure up when it's a Interstate Highway.
If I'm elected Governor, we will build new exits off Interstate Highways 90 and 94 right at the Wisconsin border. There will be parking lots there. Anybody with Illinois license plates will be required to exit the highway and park for 8 minutes before paying their reciprocity toll and being allowed to proceed.
If I'm elected Governor, we will build new exits off Interstate Highways 90 and 94 right at the Wisconsin border. There will be parking lots there. Anybody with Illinois license plates will be required to exit the highway and park for 8 minutes before paying their reciprocity toll and being allowed to proceed.
10-30-07, 09:44 AM
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NO!
We have an option to use a private toll road in the 91 corridor between Orange County and Riverside County in SoCA.
You have to pay, and the toll varies depending on the demand.
Somehow, in the deal, this private company got to dictate to the state whether improvements can be made to surrounding roads, or if new roads can even be built at all. Combine this with unmanaged growth in Riverside County, and the 91 freeway has some of the worst congestion in the country.
Fortunately, there is an excellent Class I bikeway alongside the freeway. You can easily beat the cars home!
We have an option to use a private toll road in the 91 corridor between Orange County and Riverside County in SoCA.
You have to pay, and the toll varies depending on the demand.
Somehow, in the deal, this private company got to dictate to the state whether improvements can be made to surrounding roads, or if new roads can even be built at all. Combine this with unmanaged growth in Riverside County, and the 91 freeway has some of the worst congestion in the country.
Fortunately, there is an excellent Class I bikeway alongside the freeway. You can easily beat the cars home!
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10-30-07, 09:56 AM
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I assume the OP was mainly for the bike implications, not to foster a general private/public sector debate. But I guess it comes back to that anyway, because the main issue is accountability. For example, if the controlling organization wanted to ban bikes, how do we advocate against that? In a government situation, the accountability is provided by the fact that politicians can be voted out. In the private sector, you have public or private corporations. Public ones are answerable to a board of directors, so pressure can be applied to board members, especially if you are a shareholder. But for privately-owned companies: Where's the accountability?
10-30-07, 11:16 AM
#20
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Probably shouldn't have started it then. 
Why would they need to raise taxes to just to maintain something that was able to be created at the lower tax rate?
Texas used to spend over 40% of the state budget on transportation. The state now spends under 15%, and as mentioned in the article inked a big private toll roads deal because they "no longer have enough money" for transportation.
TCS
The problem of course is that irresponsible politicians (and irresponsible voters who keep electing them) promise to not raise taxes.
Texas used to spend over 40% of the state budget on transportation. The state now spends under 15%, and as mentioned in the article inked a big private toll roads deal because they "no longer have enough money" for transportation.
TCS
Last edited by tcs; 10-30-07 at 11:28 AM.
10-30-07, 11:20 AM
#21
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I live on the outskirts of the DC Metro region, and there are two toll roads nearby (for all practical purposes they're the same road). One is owned by the state, and goes from the beltway to Dulles airport, and was supposed to become free once it had paid for itself. Yeah, right. The other, the Greenway, is private, and continues out to the "exurbs."
The Dulles Toll Road will cost you up to $1.25, depending on distance. The other will cost you nearly $4 even if you only ride it a mile. It's priced that way to discourage heavy use, so only those who can afford to throw over $2k a year away in tolls will use it daily. My take on this is that public ownership is for the people, while private ownership is for a profit. With all that we pay in taxes -- and we've got nothing on Canada or the U.K. -- there's no excuse for not being able to maintain the roads. I don't think we need new taxes, just better oversight on where our money is indeed going.
The Dulles Toll Road will cost you up to $1.25, depending on distance. The other will cost you nearly $4 even if you only ride it a mile. It's priced that way to discourage heavy use, so only those who can afford to throw over $2k a year away in tolls will use it daily. My take on this is that public ownership is for the people, while private ownership is for a profit. With all that we pay in taxes -- and we've got nothing on Canada or the U.K. -- there's no excuse for not being able to maintain the roads. I don't think we need new taxes, just better oversight on where our money is indeed going.
"But there are other devils lurking in the details, like noncompete clauses that may prevent transportation agencies from building new roads, or the inability to use roads for economic development by, say, adding a new exit to attract businesses."
Supposedly VA and the company that operates the Greenway have some sort of similar arrangement which to me is frigging nuts.
I agree with you - there's no reason this needs to be done except for bureaucratic incompetence. They're basically giving the road away for a big up-front cash outlay, after which the private company gets to collect tolls and make a big profit. OK. So instead, issue a bond, get the same cash up-front, collect the same toll, and pay less on the bond than the private corporation's equivalent profit. I'd rather pay 5% annually on a bond than sell the road to a company that will jack tolls up high enough to make double-digit profit.
10-30-07, 11:27 AM
#22
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Like all of you, I'm sure, I run across folks that proclaim "cyclists have no right to the road because they don't pay for them". If where you live is similar to where I live, and I bet it is, then direct fees and taxes on motor vehicles pay for under half of all public expenses related to transportation infrastructure. Of course, cyclists pay plent towards the roads.
Understanding that some regulation is required for six and a half billion of us to share the world, but the "must pay to move about --- but I do pay" argument misses the larger point - how is it possible that "free" citizens would have to pay the government for permission to use the public throughfares to come and go?
TCS
Understanding that some regulation is required for six and a half billion of us to share the world, but the "must pay to move about --- but I do pay" argument misses the larger point - how is it possible that "free" citizens would have to pay the government for permission to use the public throughfares to come and go?
TCS
10-30-07, 11:36 AM
#23
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"Bingo. Crumbling infrastructure: your tax cuts at work."
Tax revenue is up both nationally and in most states. Curiously, tax revenue is DOWN in states that have high and increasingly high tax rates. Like Michigan for example.
10-30-07, 01:50 PM
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Texas used to spend over 40% of the state budget on transportation. The state now spends under 15%, and as mentioned in the article inked a big private toll roads deal because they "no longer have enough money" for transportation.
TCS
TCS
Texas may also have simply stopped spending as much money on transportation. Thus the quality of infrasctructure will probably decline. How much decline is acceptable is up to the people of Texas, not myself. I have heard anecdotally that the roads can be pretty crappy there.
As to bicyclists being made to pay tolls. I'd be fine with it, as long as said toll took into account the amount of wear a bicycle puts on the infrasctructure, as opposed to a car/truck.
Also, yeah, bicycles could be excluded from roads. The only way to stop that would be regulation, if the private company decided it only wanted x type of vehicle.
10-30-07, 01:57 PM
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I think they should just raise the gas tax. Two reasons:
- It's a voluntary user based tax.
- Taxes are the only mechanism that government has to use market forces to reduce demand and encourage efficiency.