Lawmakers study tolls, private investment to advance road projects
HARRISBURG – With a seemingly limitless need for more transportation dollars to fund the state’s massive and aging road network, lawmakers are looking at tolling and the use of private investment to advance road projects. A select committee of House lawmakers is studying how other states – including Texas, Virginia and Florida – are financing new roads and road upgrades by handing projects over to private companies in exchange for their rights to recoup costs and make a profit by billing users with tolls.
Typically, the financiers have de-facto ownership of the roads with a 50-year lease or more, although in setting up the arrangements states can exert control over toll rates, building requirements and operations.
The idea has been floating around Harrisburg for a couple of years as the state’s transportation agency has fallen into a $6 billion gap between available funding and projects on its to-do list. Last year, the state took 14 road projects off its 12-year plan, and shelved 12 others for re-evaluation because of the funding shortfall.
The agency’s financial strain has been somewhat alleviated by a federal allocation of $8.2 billion from the recently enacted six-year transportation bill. But some lawmakers see a possibility in more road projects getting done by involving the efficiency and speed of private industry.
Transportation funding comes primarily from gas taxes, including an 18.4-cent-per-gallon federal tax and a 30-cent-per-gallon state tax. Also, the state generates highway funds from driver’s licenses and vehicle registration fees.
“We’re a bureaucracy,” said Rep. Roy Baldwin (R-Lancaster), a member of the seven-member committee. “You study any replacement by private industry, and private industry does it better.”
The committee has also looked into the idea of tolling as a way for the state to finance its own road projects. Tolls have been used since the earliest years of the commonwealth to turn trails into usable road networks, with 3,000 tolls roads and 220 turnpike companies operating by the 1830s.
The Pennsylvania Turnpike, now the state’s only toll road, became the nation’s first superhighway in 1940, and extended to become 531 miles after its final stretch to Interstate 476 in suburban Philadelphia was completed in 1991.
But tolling has since become an unpopular answer. Federal permission to toll Interstate 80 in 1998 never materialized because state officials refused to touch the issue.
Still, other states are moving ahead. In Virginia, road builders and operators have offered $1 billion to take over the maintenance and operations of the Dulles Toll Road for the next 50 years. The state could use that money partially to fund an extension of its Metrorail line. Chicago leased its Skyway toll road to a private company for $1.8 billion.
And Texas has a plan to build the first stretch of its 4,000-mile Trans-Texas Corridor, which will include roads and rails, with $7.2 billion in private investment, although San Antonio officials are balking that details are being kept secret to protect the company’s trade secrets, according to news reports.
The new federal transportation bill encourages private investment and the use of tolls by funding pilot projects and giving tax-exempt status on up to $15 billion worth of bonds for private companies to use in financing projects.
The Surface Transportation Policy Project, a Washington transportation advocacy group with a branch in Pittsburgh, warns that it’s still too early to tell the public effects of such arrangements, including how affordable such deals will be to drivers.
“My concern is we would lose sight of the fact that these are public rights of way. They belong to everybody,” said Anne Canby, the group’s president. “When you turn them over to private enterprise, how do you protect the public interest? And what is the public interest?”
Rep. Kate Harper (R-Montgomery) said she too was skeptical of the idea when she first joined the committee, but has since become more open-minded. In the congested Southeast, new car-pool lanes or individual toll lanes (called high-occupancy toll lanes) could be added to existing roads to reduce congestion, she said.
“The more I talk about this and read about other states’ experiences, it seems to me there is a market out there for people who will pay more to go faster,” she said.
Harper said shortfalls in transportation funding are having an effect on projects.
“I think it’s pretty clear that the cost of road-building is astronomical, and if we want extra lanes or new roads in certain areas, they might not get built without private investments,” she said.
The committee has hired Etters-based Durbin Associates to conduct a survey of other states and recommend six corridors in Pennsylvania that could become viable toll roads. The consulting firm is expected to finish its work by the end of the year, and the House committee will then recommend a plan to the Legislature. The recommendation could be to drop the issue, or to develop legislation that would provide guidelines for private investments in the state’s roads.
Alison Hawkes can be reached at 717-705-6330 or ahawkes@calkins-media.com.