Call to Action: P3 bill may not have tolls, but taxpayers need more protection
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While opponents of cronyism succeeded in preventing tolls on the Brent Spence Bridge that connects Kentucky with Ohio and carries Interstates 75 and 71 across the Ohio River from being included in so-called “public-private partnership” legislation passed by both the state House and Senate, there’s still plenty to dislike about House Bill 309.
By including transportation projects among those eligible for “P3” approval, most lawmakers have ignored the failure of such ventures nationwide and opened the door to implementing tolls on existing roads.
These tolls, which Rep. Joe Fischer, R-Ft. Thomas, rightfully calls “a second tax on existing roadways,” will generate monies which will go into the pockets of well-connected developers, contractors and builders who know how to game the system and curry political favor in Frankfort.
Fischer was joined by Reps. Kerr, Linder, Nelson, Santoro, Simpson, Turner and Wuchner in opposing this bad legislation in the House.
Senators Buford, Higdon, Hornback, Humphries, McDaniel, Robinson, Schickel, Schroder, Thayer and Webb voted against the P3s in the chamber at the other end of the hall.
“While such partnerships usually prove harmless to taxpayers on projects such as expanding student housing at the University of Kentucky, they have been disastrous on numerous highway schemes nationwide and have resulted in a large number of bankruptcies,” said Bluegrass Institute president Jim Waters. “Accurate traffic projections and accompanying estimates of revenue needed to pay for the roads are much-more difficult to come by than calculating how many students will move in and fork over the rent money needed to fund a new dorm.”
P3 transportation projects similar to those allowed by HB 309 have gone broke, including ventures involving the Indiana, American and Pocahantas toll roads, as well as Virginia’s Dulles Greenway, California’s State Route 91 and Greenville, South Carolina’s Southern Connector.
According to the Columbus Dispatch, the Southern Ohio Veterans Memorial Highway – Ohio’s first-ever P3 project – “will cost taxpayers nearly three times its announced price tag of $429 million.” Taxpayers will wind up paying $1.2 billion throughout the next 35 years just to fund a 16-mile bypass skirting Portsmouth, Ohio. (See more information about the failures of P3 projects in this recent Bluegrass Beacon column.)
“How big of a boondoggle will Kentucky’s first similar P3 road project be?” Waters wondered. “These and other transportation-related P3s face higher-than-predicted costs and inaccurate traffic projections, which – when talking tolls – mean smaller-than-projected revenues, bigger-than-expected consequences and way-too-many unknowns.”
He called upon Gov. Matt Bevin to send the bill back to the Legislature and demand that transportation projects be removed from eligibility for P3 designation.
At the very least, the Bluegrass Institute called upon Bevin to use the regulatory process to implement common-sense restraints on transportation schemes seeking public-private partnership approval by prohibiting non-compete clauses and requiring a cost-benefit analysis for each application seeking a P3 designation.
“Ensuring competition throughout the process will likely drive down costs and minimize the negative impact that the boondoggles encouraged by this policy are sure to create,” Waters said. “Requiring a cost-benefit analysis is a common-sense approach that will give government watchdogs like the Bluegrass Institute the ammunition we need to hold Frankfort accountable for economic potholes sure to be created by these P3 road schemes. Rest assured, we will do just that.”
To contact the Governor’s office and express your concern about this issue, call (502) 564-2611. You will be transferred to a message line, where you can leave your comment.