THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume IX, Issue # 103, June 4, 2007
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
WHO'S TO BLAME FOR THE SELLOUT?
By Henry Lamb
FISCAL POLICY & AMERICA'S TRANSPORTATION NEEDS: PUBLIC-PRIVATE PARTNERSHIPS AS A MEANS OF
FINANCING TRANSPORTATION INFRASTRUCTURE PROJECTS IN THE U.S.A. -- WHY PPPS ARE POPULAR WITH STATE
GOVERNORS & TRANSPORTATION OFFICIALS -- PPPS & THE PUBLIC INTEREST -- HOW PPPS AFFECT THE TAXPAYING
CITIZENRY -- THE ALTERNATIVE TO PPPS
FULL STORY:
The nation’s transportation experts have identified the top three priorities: a national freight network; urban congestion;
and connecting new urban centers with the interstate system. The American Association of State Highway and
Transportation Officials, meeting in national conference last month, heard futurists predict that the cost of meeting the
transportation needs would be $3.1 trillion over the next 25 years. State and local governments are turning to
“public-private partnerships” (PPPs) to produce the funding.
The City of Chicago was happy to partner with a Spanish-Australian group that paid $1.83 billion for a 99-year lease to
operate the Chicago Skyway. The same outfit paid Indiana $3.85 billion to operate the Indiana Tollway for 75 years. The
same Spanish company has partnered with a Texas firm to give the State of Texas $7.2 billion to build and operate the first
leg of the Trans-Texas Corridor. And Pennsylvania’s Governor Edward G. Rendell is expecting a bid of between $15- $18
billion for the Pennsylvania Turnpike.
Most states have already enacted, or are considering, legislation to authorize this PPP financing of public infrastructure.
Public opposition to PPP financing encouraged the Texas Legislature to adopt a two-year moratorium on the state’s PPP
projects. The Governor’s veto, however, along with threats from the U.S. Department of Transportation, forced the
Legislature to pass a watered-down compromise bill that blocks only future PPP projects, but allows the current
Trans-Texas Corridor to go forward.
Public opposition to PPP financing encouraged Chairman of the U.S. House Transportation & Infrastructure Committee,
James Oberstar, and Transit Subcommittee Chairman, Representative Peter DeFazio, to issue a May 10, 2007, letter to
governors and state transportation officials that warned about rushing into PPPs that did not fully protect the public
interest.
"We don’t need their advice, frankly," said Indiana Governor Mitch Daniels. He said the letter was "nothing but
Congressional posturing." Daniels’ criticism was typical of the response from state officials.
National Surface Transportation Policy and Revenue Study Commission Vice Chairman, Jack Schenendorf, told the
conference attendees that the federal program no longer has a sense of mission, which has led to competition among the
states for federal funds, and to the proliferation of “earmarks” for local political advantage.
Regardless of the finger-pointing, the fact remains that driving in urban areas is a nightmare, and driving on the interstate
system is like playing tag with 18-wheelers, and it’s getting worse, not better. The people want relief, but not at the
expense of bondage to PPPs.
Officials claim that transportation revenues from traditional sources are barely adequate to maintain existing roads, and do
not provide for future construction. If this contention is true, the next question to be answered must be: is this the result
of inadequate fuel tax rates, or have the revenues from fuel taxes been siphoned off for other purposes?
This question directed at transportation officials produces an incredible array of slippery answers. Legislators, at every
level of government, should insist that transportation taxes be spent on nothing but transportation. If transportation
taxes are used exclusively for transportation needs, and the revenue is inadequate, then a tax increase is required to meet
the needs of the people.
Realistically, with gas prices above $3 per gallon, no politician will suggest increasing the gasoline tax, when it is so much
easier to sell off a highway to a PPP, and reap billions in new money -- without having to ask the voters for a tax increase.
The voter still pays; he just won’t have a vote. And the price he pays will be more. Toll-roads built or operated by PPPs
must pay a profit to the shareholders of the firms that put up the money. If the state builds and operates the infrastructure,
that profit does not have to be built into the price, and therefore, the voter saves a bundle.
Infrastructure sales to PPPs is the hottest ticket in town. It’s going to take a monstrous effort by the people to reverse this
trend that is clearly rushing across the nation like a tidal wave. Transportation officials see PPPs as the answer to their
revenue problems. Legislators tend to “go along” with the budget committee, unless they are peppered by contacts from
their constituents.
Texas voters tried valiantly to put a moratorium on the sale of the Trans-Texas Corridor to Cintra-Zachry, the
Spanish-Australian PPP that wants to pay $7.2 billion to the state. They succeeded in the legislature, but threats from the
Governor and the U.S. national government ignored what the people want.
In every state, and every community, someone is planning, right now, to sell public infrastructure to a public-private
partnership. Chances are better than good that the PPP has its roots in another country. This can’t be good for America.
LINKS TO RELATED TOPICS:
Fiscal Policy: Taxation & Government Spending
Infrastructure Problems & Issues:
Energy, Transportation, Water & Sewer Systems,
Security Systems, Education, & Parks & Recreational Facilities
Henry Lamb is Founder and Executive Vice President of the Environmental Conservation Organization (ECO), which was
established in 1988 to protect property rights from erosion by excessive environmental regulations. Lamb is also Chairman
of Sovereignty International, an organization opposed to world government and to the statist policy agendas of political
environmentalists, global-warming alarmists, and Leftwing Liberals.
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
Cultural, Military, International, Strategic, & Geopolitical Issues
Conservative Government Ensures a Nation's Strength, Progress, & Prosperity