Category: Public Private PartnershipsUp against another short-term highway bill extension deadline, Friday Congress finally passed a two-year $105 billion highway bill called MAP-21, which stands for Moving Ahead for Progress in the 21st Century. Except that Congress’ view of ‘progress’ usually means good news for special interests, and bad news for taxpayers -- Congress didn’t disappoint. The bill removed the Bingaman Amendment that would have added protection for taxpayers by removing a financial incentive for states to sell-off their highways to private entities in public private partnerships that charge Americans 75 cents or more per mile to access our public roads. It also removed the approval of the Keystone Pipeline from the bill.
MAP-21 increases the TIFIA loan program from $100 million/year to $1 billion/year. TIFIA loans go almost exclusively to toll roads. So it’s a form of taxpayer subsidy to toll projects that cannot pay for themselves by the toll users alone -- in other words, it’s a way to build ill-conceived toll projects that aren’t toll viable by putting taxpayers on the hook for the losses. It also means the private sector gets a lower interest rate so it lowers the financing costs to the private toll entities.
Additionally, MAP-21 continues the Private Activity Bond (PAB) program that are bonds provided by the federal government exclusively for private toll interests to get favorable depreciation rates on their taxes for the financing of toll projects. Instead of putting the private entity’s own money at risk, it puts taxpayers on the hook for the losses on these toll projects.
The federal government is a more patient lender than the private sector, so by utilizing TIFIA and PAB mechanisms, the private sector gets paid back before the taxpayers. Let’s not forget that the first TIFIA loan went to a private consortium for the South Bay Expressway tollway in San Diego, and it went bankrupt in less than three years. The taxpayers lost nearly $80 million on the deal and yet your federal government just expanded this program to $1 billion a year! It’ll encourage states to toll everything that moves to get access to this new slush fund. So expect your cost to travel to explode. There can be no doubt, MAP-21 is a war on cars and a war on the middle class.
Silver lining, with loopholes of course
One silver lining is that Congress chose not to continue funding the red light camera program. So if red light cameras go up, it'll be with state or local funding, not federal. The other silver lining in MAP-21 is Senator Kay Bailey Hutchison's Freedom from Tolls Amendment taking effect for the entire country, not just Texas. Hutchison has advanced a provision to protect Texas taxpayers from having existing free lanes on our highways from being converted into toll lanes. There are caveats to it that are not taxpayer friendly: public authorities can still add new toll lanes to existing freeways and they can convert HOV lanes into toll lanes at any time (so watch for HOV lanes to pop-up all over so they can later convert them to toll tax lanes).
The MAP-21 language, however, that was not under her control, seems as if it was specifically written so TxDOT could still convert existing lanes on US 281 in San Antonio into toll lanes (as was the state ban written in 2005). It excludes ‘auxiliary lanes’ in the number of lanes that cannot be converted into toll lanes. So for instance, on US 281, the Texas Department of Transportation (TxDOT) calls the third main lane each direction ‘auxiliary lanes’ not main lanes, so they can proceed with converting an existing free lane already paid for and open to traffic into a toll lane and not break this federal law.
Though Hutchison’s Amendment in the Appropriations bill for Texas is stricter and would not allow such a conversion, the 281 environmental clearance has been so delayed by the Alamo Regional Mobility Authority (a full year behind 1604 even though 1604 studies 36 miles and 281 only 7.8 miles) that it will not be in effect when 281 receives environmental clearance in 2014. That’s by design, of course. They’ve been waiting out Hutchison because they’re intention all along has been to convert existing free lanes on 281 into a tollway...
So the stakes have been raised on who becomes the next U.S. Senator to replace Hutchison -- David Dewhurst would mean opening the toll tax and freeway-to-tollway conversion floodgates, while taxpayers have at least a fighting chance with Ted Cruz.
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