States told not to rush into leasing toll roads

Two congressmen influential on transportation issues have written to state officials warning against a rush to lease toll roads and threatening to "work to undo any state . . . agreements that do not fully protect the public interest."

Both Pennsylvania and New Jersey are exploring the idea of leasing toll roads, following the recent examples of Indiana and Chicago. Gov. Rendell wants to lease the Pennsylvania Turnpike this year to generate about $965 million a year to fix roads and bridges. Gov. Corzine has suggested that leasing the New Jersey Turnpike and Garden State Parkway could help ease the state's debt burden.

In a letter sent last week to governors, state legislators and state transportation officials, U.S. Reps. James L. Oberstar (D., Minn.) and Peter DeFazio (D., Ore.) urged caution. Oberstar chairs the Transportation and Infrastructure Committee, and DeFazio chairs the subcommittee on highways and transit.

"Although we invite all financing options to be on the table as we evaluate opportunities to increase investment in our nation's infrastructure, we strongly caution you against rushing into PPPs [public-private partnerships] that do not fully protect the public interest, the integrity of the national [highway] system, and which do not constitute a sustainable national system of transportation financing," the letter said.

"The committee will work to undo any state PPP agreements that do not fully protect the public interest and the integrity of the national system," the letter said.

Oberstar and DeFazio have criticized the Bush administration for advocating leases as a way for states to get necessary funds for building and fixing highways.

The Indiana Toll Road was leased last year for 75 years for $3.8 billion and the Chicago Skyway in 2005 for 99 years for $1.83 billion.

"These deals make good business sense to the companies that are investing in the projects, but we have serious concerns about whether the transactions offer a net balance of benefits for the American public," the letter said.

". . .Shortsighted and unbalanced PPPs that mortgage our nation's surface transportation infrastructure for generations to come may favor parochial and private interests to the detriment of an improved 21st century national transportation system."

After receiving the letter, Rendell's office said the Pennsylvania administration was not rushing into any deal.

"We're taking our time and doing a thorough analysis," said Doug Rohanna, a spokesman for Rendell. "The governor's goals mirror their state goals - to protect the public interest."

Rohanna said other ways of raising money to repair Pennsylvania's battered roads and bridges could be more painful for taxpayers, citing a higher gasoline tax as an example. Pennsylvania has the nation's 10th-highest gasoline tax, at 50.7 cents per gallon (including federal taxes).

Rohanna said Rendell "will insist that any deal be in the best interest of the driving public and the Pennsylvania taxpayers."

In New Jersey, Corzine's spokesman Anthony Coley said: "When the final structure of any monetization proposal is determined, we would certainly address the concerns" raised by Oberstar and DeFazio.