traffic is brought to you by
Sticky-Widget Investments Inc.'
as that might sound, it could happen in the not-too-distant
future. And they won't be talking about a rush hour report
on your car radio, but about the real thing happening on the
highway you're traveling.
Unless state and local
governments and the public accept the idea of employing
profit-driven private capital to finance major highway
projects, the nation faces "a collapse of our transportation
system," according to an internationally recognized
Kevin Soucie was brought to
Delaware on Nov. 13 by Wilmington Area Planning
Council to keynote a presentation on 'public-private
partnerships' to address Delaware Department of
Transportation's financial crisis, which earlier this year
forced a drastic cutback in its capital program. The
situation is not expected to be any better when the General
Assembly 'bond bill' committee takes up the fiscal 2008
Jim Hatter, a financial
specialist with the Federal Highway Administration, said
Delaware is not alone. Of the 50 states, only Nevada, with
extensive revenue from casino gambling, appears able to keep
abreast of transportation infrastructure needs using
proceeds from tax traditional tax financing. "Insufficient
capital is where we're at today," he said.
Hatter said relatively few
people are yet aware of the inadequacy of the pay-as-you-go
system that has been used since the 1950s with the result
that there is considerable political risk in considering
"innovative alternatives." Although he did not refer to it,
that was borne out by widespread public and legislative
opposition to a proposal by former transportation secretary
Nathan Hayward to 'privatize' the Delaware Turnpike and the
tolls-financed Korean Veterans Highway portion of Delaware
Massive increases in the
gasoline tax, registration fees, tolls and "credit card
financing" through bond sales which result in
ever-increasing portions of the transportation budget going
to debt service are even more unacceptable, Soucie said.
To illustrate the point, he
presented a hypothetical scenario in which a government
agency -- the Department of Groceries, or Del-Dog -- took
over the operation of grocery stores. Instead of individuals
purchasing food, they would be able to take what they wanted
from shelves and would be assessed a 'meal tax' which had no
relationship to the amount they consumed. "That's exactly
how we finance transportation in most states. ...
Transportation for the most part is free and available
24 hours a day -- which sends a message to the consumer to
overuse and to the producer to underproduce," Soucie said.
Rather than rely on taxes and
tolls set at politically acceptable levels rather than what
is needed to cover actual cost, Soucie said it more logical
to turn to the private sector.
"The world is awash with
capital just looking for a source of return on investment,"
he said. "We have to address this need and use a model which
makes economic sense."
In Milwaukee, where his firm
is based, a new freeway interchange was financed
privately. Drivers using it pay a toll, which is collected
by scanning moving vehicles electronically in the same way
that E-Z Pass express lanes work. Drivers have the option of
having their license plates scanned and being billed for
each time they pass or obtaining a transponder and receiving
a significant discount on a monthly bill
Soucie did not say what
the toll is and what, if any, public authority governs it,
but indicated that the revenue generated is sufficient to
justify the private upfront investment. "Investment bankers
view it very favorably," he said.
Hatter said drivers on
Interstate 5 in San Diego have the choice of paying to
use a separated high-occupancy vehicle express lane or
traveling free in the other more congested lanes. In that
arrangement, the toll assessed electronically is changed to
reflect actual traffic volume at any given time. The greater
the volume, the higher the toll. The amount is displayed so
that drivers can choose whether or not they want to use the
"I know that 'profit' is a
dirty word ... [but] there are major private roads all over
the world," Soucie said, adding that the future comes down
to whether to accept their inevitability or the massive tax
increases that are an alternative.
Tigist Zegeye, executive
director of the planning council, said there is ample
incentive to "identify new sources of revenue." The gap
between what is desirable in the way of transportation
improvements to satisfy the needs of a growing New Castle
County and likely available revenue from present sources,
she said, will be $10 million by 2014 and $2.5 billion by
CLICK HERE to read
about what's happening
in Pennsylvania, according to the Philadelphia Inquirer.