Electoral fallout on toll biz - several certain changes, other possibles

Come mid-February next and the 8-year Brimmeier-Hatalowich reign at the Pennsylvania Turnpike Commission will end. With the governorship going to Republican Tom Corbett, and Republicans now in charge of both houses in the state legislature, serious changes are certain at the nation's oldest Turnpike. Corbett, 61, and state attorney-general, has been privy to a thorough-going grand jury investigation of the Turnpike. He refrained from using that information during the campaign, but he knows the dirt.

By late January Corbett will have installed a new secretary of transportation who takes the position of chairman ot the Turnpike Commission ex officio. The Commission always has two appointed Democrats and two appointed Republicans nominated by the two parties legislative leaders. The governor's ex officio chairman is the swing vote. By established tradition the incoming administration gets to nominate a new CEO and COO.

Governor-elect Corbett has pledged not to increase "taxes or fees." Tolls as fees seem likely to be constrained, at least. Corbett has said that he wants to make more use of public-private partnerships and toll financing for major highway upgrades.

New chairman of the state house transportation committee will be Rick Geist, another supporter of P3s and tolling.

Corbett and Geist both seem cautious by temperament but Pennsylvania's dire budgetary situation - a $3b to $4b deficit -  may drive them to radical moves like privatization of the Turnpike or tolls on the state's interstate highways. With GOP control of the governorship plus both houses of the legislature they might prevail. And - see the end of this piece - the US Congress may remove federal obstacles.

Maine

In Maine the Democrat Libby Mitchell, former house speaker got a tiny 19% of the vote, coming in third after an independent. As in Pennsylvania, Maine Republicans also swept into the majority in the state house and senate.

The state's new governor will be Republican Paul LePage, 62, a small businessman.

He has already sided with the city of York in its long-running opposition to cash toll collection at a large new toll plaza on the Turnpike, saying of the city's proposal for all-electronic: "I'm cheap, if it saves money I'm in favor of it."

The state Turnpike's CEO Paul Violette, a Democrat appointee seems likely to be retired.

Ohio

The Ohio Turnpike's CEO George Distel was previously a Democrat member of the state house. He was put into his present job by Democrat governor John Strickland.

With Republican John Kasich as governor, Distel will probably be replaced - although he seems to have been a decent manager and apolitical.

Detroit bridge

In Michigan the proposed third Detroit area crossing to Canada called the DRIC is the big issue. The former Democrat regime was so keen to build this bridge they were prepared to accept Canadian Government loans when it became clear they couldn't raise the money in commercial markets. Shopped as a P3 a request for proposals the DRIC bridge project turned up a willingness to only commit to availability payments based concessions, not toll concessions.

The governor-to-be, Rick Snyder, took the position that he supports the DRIC bridge "so long as taxpayers are not held liable." That seems to rule out anything less than a full toll concession, ruling out an availability payments arrangement. A purge of the state DOT seems likely since it was recently found to have systematically misled legislators and the public about the financial viability of the project.

Texas

Gov Rick Perry (Repub) easily won re-election in Texas against the Democrat Bill White, former mayor of Houston. Perry wants to press ahead vigorously building new roads, and said he'd try and involve investor owned toll companies.  Interestingly White criticized Perry for an overcentralized approach, for not allowing counties and cities to take the initiative on toll financing.

The Democrat said decisions on toll versus tax financing of roads should be left to local leaders to decide.  

And White said that under Perry the state (TxDOT) had taken on far too much debt for roadbuilding:

"They failed to plan ahead with a plan for the future, they failed to plan ahead on how the debt would be repaid without cannibalizing the operations and maintenance of Texas roads, and failed to establish trust and confidence."

To that extent White the Democrat was criticizing Perry from a conservative perspective.

But the two clashed over the role of private investors in road financing, White taking the position that it's undesirable and that tollroads should generally be built by local public toll authorities. Perry on the other hand said his priority is to get legislation passed to restore the state's authority to seek private investors for toll concessions. Earlier legislation lapsed in 2009 after the big fight between NTTA and TxDOT over who would own Tx121 - now NTTA's Sam Rayburn Tollway.

TxDOT's growing debt load, and NTTA's too, will probably limit the extent to which they can finance new tollroads, so the logic of Perry's call for enabling legislation for P3s may grow more compelling.

But tollroads in Texas have aroused passionate feelings, and not only among people who think of themselves as 'liberals.'  Some of the tea-partiers share that antagonism. Attitudes to tolling in Texas don't follow any Republican/Democrat or even conservative/liberal divide.

Derailments likely

The cause of rail transit, especially highspeed rail, will be hit hard by the conservative sweep of governorships and gains in many legislatures. Many of the new governors cited highspeed rail projects - lowspeed by comparison with European and Asian rail! - were highlighted as wasteful and absurd by the newly elected governors.

Scott Walker the new governor of Wisconsin made a proposed highspeed rail line Milwaukee to Madison his poster-child for Democratic waste and spendthrift policy.

Oberstar retired by voters

James Oberstar a 36-year, 18-term congressman and chair of the US House transportation committee was defeated in his district. But with a Republican-controlled House he would have lost his chairmanship anyway. Oberstar was a faithful supporter of most of the road-hostile, rail-friendly policies of the Obama administration. At the same time he was quite ineffectual - even with majorities in both houses of the congress.

The administration and congress have limped along for the past several years unable to do a  normal five yearly transportation bill, and gas tax revenue deficiencies are increasingly supported with appropriations from the general fund - deficit financing.

Mica an odd fit

His likely successor John Mica, from the Orlando FL area is something of an odd fit.

Mica seems to be overly enthusiastic about rail and anti-road for the temper of the new Republican governors and congresspeople. He blocked Florida's Turnpike from developing toll express lanes on I-4 through the Orlando area and has championed light and commuter rail like a true 'liberal.'

And Mica has supported heavy taxpayer funding of highspeed rail projects which puts him way out of line with the new majority.

Gas tax hike being pushed by builders lobbyists

ARTBA, the road builders lobby, are calling for a 10c to 15c gas tax hike. This seems unlikely to fly since most of the newly elected congressmen campaigned on "no new taxes."

John Mica might have had ARTBA in mind when he said to the Wall Street Journal: "Anyone that thinks the new members who are coming to Congress, whether Republican or Democrat, are going to vote for a gas-tax increase - they're smoking some kind of funny weed."

COMMENT: Hopefully on this Mica is right and the new US Congress won't go the ARTBA route. Hiking the gas tax would just prolong the agony a collapsing funding system - a dysfunctional set of arrangements that involves unsustainable federal hand-me-downs, top-down regulation, and shameless logrolling and earmarking that deserves to be completely replaced. 

Highway funding should be based on the viability of a user-pays approach which can be implemented as self-contained projects at the state and local level.

Removing obstacles to local tolling initiatives could get through the new Congress.

LIGHT RELIEF: A fun write-up of Tuesday's results "Last Remaining Politician Must Rebuild Entire Government Following Bloodiest Midterm Election In American History" at The Onion:

http://www.theonion.com/articles/last-remaining-politician-must-rebuild-entire-gove,18384/

TOLLROADSnews 2010-11-03