Will the Highways of the Future Primarily Benefit the Rich?

October 11, 2013
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It could be said that Robert Poole, the Searle Freedom Trust Transportation fellow and director of transportation policy at the Libertarian Reason Foundation, has never seen a toll road – or, more precisely, a privatized toll road – he didn’t like. Exhibit A: his newly released Interstate 2.0: Modernizing the Interstate Highway System via Toll Finance.

Poole calls his project “Interstate 2.0” to signal that Reason’s agenda is something that cool, leaning-forward folks will want to support. But the bottom line is that Poole’s proposal offers nothing innovative: just another proposition for the kind of relentless privatization that has stricken cities across the country, rolled into a highway-long package.

Ken Orski’s highly influential Innovation Briefs for September 17, 2013, reviews the challenges Poole’s proposal faces and then sums up the next steps Poole must take to see his proposal bear fruit:

So, we hope that Mr. Poole’s study will be brought not just to the attention of the Beltway audience and the toll-advocacy community where it will predictably meet with plaudits, but, more importantly, to the attention of governors, state DOTs and state legislators. Their collective judgment will be decisive in whether Congress votes in favor of lifting the current legislative restriction against Interstate tolling or leaves it in place. A presentation at the upcoming AASHTO annual conference on October 17-22, followed by presentations at the next annual conferences of the National Governors Association and the National Conference of State Legislatures (NCSL) would be a good way to start the dialogue.

Orski sounds pessimistic, but Poole, a founder of the Reason Foundation, is not without powerful allies that include a Who’s Who of conservatives. They include the Koch family foundations and the Olin, Scaife and Bradley Foundations.

Poole’s case for rebuilding the interstate and funding it through electronic tolling combined with privatization is essentially a TINA (There is No Alternative). He posits that our Interstate system is crumbling and overburdened and fuel taxes don’t yield enough to pay for new highway construction (as they have in the past). Therefore, Poole says, construction of a new interstate should be financed through electronic tolling – and, to minimize the danger of risks, recruiting the cooperation of “private partners” is the way to go.

However, the Reason report and its cheerleaders ignore the heavy downsides to infrastructure privatization, which have been playing out in cities across the country – high costs for individuals, public anger, secrecy, entrenched corporate control. The report also ignores the fact that we live in a changing transportation world: one in which an increasing numbers of cars and trucks driving increasing numbers of miles do not make up the preordained future.

The Insidious Tradition of Public-Private Partnerships

Existing US highway privatization contracts run for 50 to 99 years, making predictions of highway use – and revenues – a challenge. In addition, traffic projections, which translate into tolls paid, have been notoriously unreliable, even in contracts’ first years. Traffic predictions, which tend to be about 25 percent on the high side, mean that projects get built but then fail to bring in the revenue that was forecast.

In addition, infrastructure privatization contracts are full of “gotcha” provisions to ensure private contractors make money. The Chicago parking meter deal is an example. The cost to the public of building Reason’s Interstate 2.0 would include far more than tolls. It will include lost public control and reimbursing private “partners” for lost anticipated earnings. Public anger over privatization contract terms has led contractors to refuse the public to see the contracts, essentially repealing Freedom of Information Act rights.

Copyright: AlterNet