Association News
Need quick cash? Hock your road$
Feds offer model legislation to help states privatize public roads

By David Tanner
staff writer

The trucking world watched closely in 2006 as the Indiana Toll Road was leased to private investors.

Someone else was watching too – namely the feds – who decided to use the Indiana lease as a model to help other states head down the road to privatization.

U.S. Department of Transportation officials announced in January that they would provide states with model legislation to pursue private leases for highways and other public infrastructure.

The model was based on a survey of existing state laws, according to statements from DOT officials, and can be used to help states authorize “building, owning or operating highways, mass transit, railroads, airports, seaports or other transportation infrastructure.”

Transportation Secretary Mary Peters stated in a press release that the DOT intends to reduce or remove barriers to private investment on additional lanes and roads to help ease congestion on the highways.

The Owner-Operator Independent Drivers Association is opposed to such privatization deals, and supported a lawsuit in 2006 – even though the plaintiffs lost – to challenge the constitutionality of the Indiana Toll Road lease. That lawsuit made it to the Indiana Supreme Court before the court ruled in favor of state officials.

“We think it’s outrageous,” Todd Spencer, OOIDA executive vice president, said of the DOT announcement. “It is unprecedented for DOT to be writing model legislation for states and we are contesting it.”

OOIDA and its membership are not alone in their fight against private highways and toll roads.
Spencer appeared Jan. 9 on “Lou Dobbs Tonight” on CNN in a segment that included U.S. Rep. Peter DeFazio, D-OR, speaking out against private leases for highways and infrastructure.

“Those roads belong to the public,” Spencer told Land Line Magazine. “We need to tell them, ‘these roads are not yours to sell.’ ”

A poll by CNN indicated the same thing. CNN asked viewers of the segment, “Do you believe U.S. highways and roads should be owned by private companies?”

With 8,430 online votes cast, 97 percent of the viewers responded “no” while only 3 percent voted “yes.”

Contacting lawmakers, Spencer said, continues to be a strong way for truckers to show their feelings on the issue, which has an impact on their businesses and quality of life.

Spencer cited recent news from Pennsylvania as an example of how big money can sway political agendas.

Gov. Ed Rendell solicited letters of interest in December 2006 from possible investors for the Pennsylvania Turnpike. He received 48 letters of interest, showing how domestic and foreign investors are ready to line up for such deals.

“The Pennsylvania Turnpike could fetch billions,” Spencer said, adding that the long-term costs to consumers, truckers and motorists would be astounding.

Tolls will only increase under private control, he said.

“The money not only pays for maintenance and operation of the roadway, but they have to please investors to the tune of 8 to 10 percent,” Spencer said. “All of that will be paid by highway users.”

Just as Indiana officials claimed their state was strapped for highway cash leading up to the $3.85 billion lease to ITR Concession Co., a Spanish-Australian consortium of Cintra-Macquarie, Gov. Rendell of Pennsylvania used the same buzzwords when soliciting possible support for leasing the 531-mile Pennsylvania Turnpike.

Officials in Ohio, New Jersey, Delaware and Kansas also announced they might seek private leases of their turnpike systems to put their transportation budgets back in the black.

But, Spencer said, he believes those same states have shown irresponsibility when assembling their highway budgets in recent years as they began working on legislation to allow private investment in their infrastructure.

“We need to hold our elected officials accountable for our highway dollars,” Spencer said.

And with the U.S. DOT providing model legislation to give state legislatures a little push toward privatization, Spencer said the inevitable is possible without an intervention from the public.

“The message the Bush administration is sending to the states is, you don’t have to be responsible for your transportation budgets, you can just sell off the roads,” Spencer said.

In 2005, Illinois leased the Chicago Skyway to the Cintra-Macquarie consortium in the first such privatization effort of its kind authorized by the federal highway law known as SAFETEA-LU.

It was SAFETEA-LU, which was signed into law in August 2005, that spurred DOT officials to write the model legislation for states, according to the DOT press release.

Twenty-one states and Puerto Rico already have some authority for privatizing infrastructure, according to DOT officials, but the model legislation could remove the remaining barriers for those states and others.