Senate takes steps to rein in public-private partnerships

By David Tanner, Land Line associate editor | 3/13/2012

By adding an amendment to its proposed transportation bill on Tuesday, March 13, the U.S. Senate sent a message that public roadways should not become profit centers for states and private banks. OOIDA supported the amendment offered by Sen. Jeff Bingaman, D-NM.

A majority of senators, 50-47, voted to add the amendment to their two-year, $109 billion transportation bill, S1813.

OOIDA cites the Indiana Toll Road as an example of how a public-private partnership – in the form of a 75-year lease – puts investor profits above all else. Gov. Mitch Daniels leased the 157-mile toll road to private investors from Spain and Australia in 2006 for $3.85 billion. The lease guarantees the consortium a profit against the rate of inflation through the year 2081, all paid for by increased tolls on truckers and motorists.

“Your amendment would serve as a serious disincentive for states looking to ‘cash in’ on selling off their highways to private entities by using common sense. If you give a private entity control over your highway, then it is no-longer eligible for federal funding,” OOIDA Executive Vice President wrote in support of the Bingaman amendment leading up to debate.

“These private entities see these critical pieces of our nation’s economic infrastructure as nothing more than profit centers as the long-term lease agreements give them the green light to focus on ensuring profits – not ensuring fairness to truckers and motorists – when setting toll rates.”

OOIDA points out that Bingaman went to bat for truckers and motorists in another part of the transportation bill. A month ago, Bingaman added language to the base bill that would change the tax code for investors seeking to lease public infrastructure for profit. That provision would prevent an investor from expediting the depreciation process for a roadway asset while also profiting from tolls.

“It takes a big step in getting rid of a double subsidy to these big, private banks – one subsidy from truckers and motorists who pay tolls and one subsidy from the tax code benefit,” OOIDA Director of Legislative Affairs Ryan Bowley said.

The Senate was scheduled to vote on additional amendments on Tuesday afternoon including other provisions related to tolling.

OOIDA supports an amendment offered by Sen. Kay Bailey Hutchison, R-TX, which prohibits federal highways from being converted to toll roads.

“It is wrong for the federal government to allow it, and it is wrong for a state to ask for it,” Hutchison told the Senate during opening remarks.

OOIDA opposes an amendment from Sen. Tom Carper, D-DE, that would allow up to 10 states to convert interstates into toll roads. Current rules allow only three states to convert freeways to tollways.

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