gubernatorial committee set up to address Delaware
Department of Transportation's financial situation
decided not to offer recommendations. Instead, it
will submit a report defining the situation and
listing possible sources of additional revenue along
with the pros and cons of pursuing each of them.
Governor Ruth Ann Minner
would then be expected to choose which ones to put before
the General Assembly, which would have the final say as it
enacts next year's capital-spending law, the so-called 'bond
Senator Anthony DeLuca said
that suggestions the governor "can call a special session of
the General Assembly and this is going to get done" are
unrealistic. "It's not going to happen."
He said legislators and the
general public "will have to be educated" about the
dimensions of the problem and its ramifications.
Representative Roger Roy said members of the joint committee
which drafted that legislation during this year's session
"didn't have any idea what the size of the problem was."
The core problem, which
transportation secretary Nathan Hayward and DelDOT officials
have been putting before people in a variety of public and
private venues since the Assembly's 'bond bill' committee
drastically slashed the department's fiscal 2006 capital
spending program last spring, is that money which was
supposed to be available in the Highway Trust Fund for
building and upgrading roads and other
transportation-related capital projects has been siphoned
off over the years to finance operations.
Consequently, Hayward has
said the department needs new and enhanced sustainable
revenue streams just to be able to complete projects already
authorized without adding any new projects to the list. "We
need more than boutique solutions," he said at a meeting of
the governor's committee on Oct. 31.
Michael Morton, chief of
fiscal policy and analysis in the state comptroller
general's office, presented a detailed scenario of what will
happen if nothing is done. DelDOT, he said, will amass a
cumulative shortfall of $2.7 billion by fiscal 2012.
If capital financing is
maintained at the current level with only adjustments for
inflation, he said currently authorized projects literally
could never be completed.
Morton's presentation listed
several possible sources of new revenue. The largest return,
$48 million, would come from a 2% increase in motor vehicle
document fees. Raising tolls on the Delaware Turnpike and
the Delaware 1 toll road by $1 would bring in $29.5 million
and $25 million, respectively. A 5¢ increase in the gasoline
and diesel fuel tax would produce $25 million.
Hayward told the committee he
wants to explore a "concession option." That would
involve long-term 'leasing' of the turnpike, Route 1 and the
proposed U.S. Route 302 toll road, separately or in
combination, to a private enterprise. While terms of the
arrangement could vary widely, a basic arrangement would
involve the concessionaire receiving all toll revenue for a
stated number of years in return for an immediate large
lump-sum payment to the state. Hayward said that money
should be treated as an endowment with DelDOT using the
income it generates to finance future capital projects.
He cited as a possible model,
the recent arrangement involving the Chicago Skyway, which
links the Indiana Turnpike with Dan Ryan Expressway in
Chicago. A consortium of Cintra Concessiones, a Spanish
company, and a subsidiary of Macquarie Bank, a multinational
bank headquartered in Australia, is paying $1.8 billion for
a 99-year lease.
During discussion at the
meeting, which was dominated by members of the legislature
who are on the committee, several other proposals were
suggested. None appeared to generate a favorable consensus
while only one -- cutting the DelDOT staff by offering an
early-retirement plan -- was rejected.
DeLuca said a good starting
point would be for the 'bond bill' committee to start from
scratch each year re-authorizing subsequent steps in the
process of bringing specific projects through the planning,
design and construction stages. "It's easy to get [projects]
started; it's not easy to come up with the [money] needed to
build them," he said. "Everything that's in the pipeline
doesn't have to be completed."
Sussex County Administrator
Robert Stickels suggested imposing a "special real estate
tax" on properties in new developments to pay for the roads
needed to support the developments.
Representative Wayne Smith
suggested as a variation on that a fee imposed at the time
of settlement of a property sale. He described that as a
"low-pain" alternative since it would, in effect, be spread
over the 15- or 30-year term of mortgage.