Case for independent public toll authority vs DOT tolls debated in Maine

Controversy continues in New England over whether government toll operations should be conducted within a state DOT or through a public toll authority. New Hampshire has represented the first model with toll operations part of the New Hampshire DOT while, at time of writing, Maine and Massachusetts have their toll authorities.

In Massachusetts the die is cast: the Authority seems certain to be abolished and toll functions moved, New Hampshire-style into the state DOT. The Turnpike's past mismanagement of the untolled Big Dig project and its legacy of multi-billion dollar debt have doomed the Massachusetts authority.

But Maine Turnpike Authority has a better chance for survival. In that state there's a governor almost completely uninterested in transportation and inclined to leave it alone. The authority has a mixed reputation. It picked an unnecessary fight with neighbors last year with a proposal to greatly expand the footprint of the York Toll Plaza, its largest mainline plaza. But it is now retreating from that folly.

Toll increases however have provoked a few Mainers to say the MTA should be abolished. There's an interesting exchange in the op-ed pages of the Kennebec Journal. Jeff Pidot, a former attorney in state government makes the case for putting the state Turnpike under the rest of state government.

Pidot says:

"The problem inherent in an autonomous Turnpike Authority is that it has no constituency beyond its engineers and bond-holders and no responsibility to the broader public interest. The authority's administrators, overseers, private consultants, attorneys and financiers all operate independently of the rest of state government."

He calls the highways of the state a "balkanized system" as a result.

"Rather than being operated by an autonomous agency, the turnpike should be governed as the transportation and economic lifeline that it is, responsive to overarching issues involving the state's economy, integrated transportation systems, regional needs and fairness, environmental quality, as well as citizen pocketbooks and communities. Bringing the turnpike under broader public control by fully integrating it into the rest of state government would make it far more responsive to this broad public interest."

Case for "public/private model"

The contrary view is put by Dana Connors, a former state commissioner of transportation, now president of the state chamber of commerce.  He says he once believed in having politicians and government officials overseeing tolls - when he was one of them!

But he says after better understanding both forms he has changed his mind.

He calls a state toll authority a "public/private" model in that it is accountable to both public and private sectors.

"This dual accountability is the principal reason why the (Maine) turnpike has been responsibly maintained over the years, while roads and bridges under the jurisdiction of the state have been allowed to deteriorate to a point where their eventual repair will be far more costly. The turnpike's public/private accountability is the reason why the authority has steadily kept pace with essential capital improvements. In contrast, the state system of roads and bridges faces a backlog of more than $3 billion in the next 10 years."

Connors argues that public accountability occurs through a board of directors appointed by the Governor and confirmed by the state senate, and the requirement that the authority's bonds and annual operating budget be approved by both the legislature and the governor, pubic hearings requirements and right-to-know laws.

On the private side: "unlike most state government agencies, the turnpike authority is also accountable to formidable watchdogs in the private sector, including bondholders, consulting engineers and credit rating agencies. The interests of these private sector players are aligned with the interests of Maine citizens. They want the turnpike and its bridges to be properly maintained and the organization efficiently and effectively managed."

Connors says what he calls this "combination of public and private scrutiny" has enabled Maine to benefit from a safe, modern, well-maintained and efficiently managed turnpike that requires exactly zero dollars of state or federal funding from taxpayers.

He concludes: "Nobody likes to pay more in tolls, but the turnpike authority model with its dual public/private accountability is one that makes sense."

Intriguing that Connors invokes the "public-private" formulation to describe what are more usually described simply as public authorities.

Third, fourth and fifth models

A third form is the not-for-profit corporation that was popular a decade ago. Like the public authority model this can raise loan money, not equity - a big problem when like now the institutions of lending are so broken.

Other models of course involve more private risktaking and allow more private 'skin in the game' - concessions, longterm leases or development agreements, more often called public private partnerships (P3s). They involve a government designed framework within which private financing and operations is run like a for-profit business and defined term for private 'ownership' of the project.

A fifth form is full private ownership in perpetuity, most commonly applied to toll bridges, and usually requiring some 'charter' or legal right to operate the business and to have connections to abutting public roads.

The case for state DOT operation of tollroads has to be based on a strong faith in the efficiency of large, centralized monopoly organizations, and in the benevolence of "public control" via the electoral and legislative process. Others see more virtue in public control via the public as customers and their control of the cash registers and equity 'skin in the game' for operators.

TOLLROADSnews 2009-03-10