New
report outlines dangers and need for public
protections
Deals to privatize public toll roads, such as those
proposed last week by Governor Crist, typically fail to protect the public,
according to a new report released by the Florida Public Interest Research Group
(Florida PIRG). The report explains seven basic protections that are required to
ensure that these toll road sell-offs would benefit the public over the long
term. None of these safeguards or assurances are currently in
place.
“The public interest must stand at the forefront of any
potential road privatization deal,” said Brad Ashwell, Advocate for Florida
PIRG. “These deals use a private middle man to deliver a big upfront payment in
return for decades of escalating tolls from drivers. Before we consider such
sell offs, we need to be sure that the public wouldn’t lose control of these
roads, that the public couldn’t deliver the same value itself, and that the
process is fully transparent and accountable.”
Gov. Crist is reportedly exploring ways to privatize
existing toll roads and bridges as a way to close the projected $2.5 billion
budget shortfall over the coming two years. Gov. Crist has proposed 50-year
leases on Florida toll roads such as Pinellas Bayway,
Alligator Alley, and the Skyway in return for upfront cash. The Crist
Administration could use the cash to close its immediate budget shortfall, but
Florida
drivers would pay higher tolls for generations and the public would lose out on
those revenues.
The report from Florida PIRG describes how New Jersey, Pennsylvania,
and Texas
recently backed off from private road deals. New Jersey’s Governor Jon Corzine had
previously headed Goldman Sachs, a company that earned millions in road
privatization consulting fees in Chicago and Indiana. After a lengthy
consideration of whether to privatize New Jersey’s own toll roads, Gov. Corzine
concluded that it made more financial sense for the public toll authority to
itself borrow money against future toll hikes. Texas placed a two-year moratorium on private
deals after the public toll authority showed it could deliver billions more in
value with the same toll hikes. Massachusetts passed a law in 1993 that
ensures any private deal must demonstrate that it saves the public value in the
long term.
“There’s nothing innovative or magic about these
proposals,” explained Ashwell. “It’s just borrowing money from big future toll
hikes. If elected officials believe they must raise tolls, then they should make
that case to the public, rather than outsourcing the political will and the
revenues to some company in return for a short term wad of
cash.”
According to the report, Road Privatization: Explaining the Trend, Assessing
the Facts, and Protecting the Public, toll road privatization
proposals must include seven basic safeguards for the public. These include
assurances that the public couldn’t secure comparable payouts by borrowing
against the same toll increases promised to private companies. Public control
must also be retained over transportation planning and management decisions. The
report outlines further bottom-line protections in terms of transparency of the
process, road safety, and accountability of law makers to the
public.
