Monday, February 23, 2004

"A polite form of highway robbery."

Private highways, Heed a flashing yellow light


Star Trubune Editorial - Our Perspective
Minneapolis Star Tribune
Copyright 2005

Accountability is a word that the Pawlenty administration is particularly fond of, and for good reason. Government should stand accountable for its spending of public money and its stewardship of public assets.

That's why overseers at the attorney general's office, the Department of Administration and the Legislature should pay close attention this week when Lt. Gov. Carol Molnau opens the process of inviting road-building companies to add private toll lanes to metro area freeways.

Privatized toll roads are a novel idea that might help relieve traffic congestion in some places. But Minnesotans need reassurance that Molnau, who doubles as the transportation commissioner, won't get swept away in some rosy ideological haze and, in some back room with some contractor, strike a sweetheart deal that takes the state for a ride.

Don't laugh. That's close to what happened in California in the early 1990s. Legislators caught in a budget squeeze and steeped in no-tax ideology saw private toll lanes as a win-win solution to rising traffic congestion in the endless suburbs southeast of Los Angeles. Under a banner proclaiming, "New roads, no tax dollars," an Omaha-based contractor was hired to build and operate four new toll lanes in the median of Hwy. 91 in Orange and Riverside counties.

When opened in late 1995, the lanes stretched 30 miles from Buena Park to Corona. Their $135 million cost was privately financed with bonds to be repaid through tolls. But those bonds would not sell unless a noncompete clause was included. The clause prohibited the state from improving the public portion of the roadway, so as to induce more drivers onto the private toll lanes. The clause also prevented any competing roadway improvement within 1.5 miles.

As often happens with road expansion, Hwy. 91 was again clogged with traffic within three years. When the state tried to add lanes to the public portion, the company sued, citing its noncompete clause.

Finally, in 2002, after a barrage of litigation, Orange County stepped in to purchase a key stretch of the toll lanes in order to make crucial road and transit improvements. The county paid the private operator $207.5 million for 10 miles, and faces a similar high-cost dilemma with three other local privatized toll roads. These roads contain no public lanes but do have noncompete clauses that prevent capacity improvements. Four years ago the county tried to persuade the state to buy the roads, but the $3.5 billion price tag was too high. Two of the roads are popular and profitable, but the San Joaquin Hills road is failing and cannot meet bond obligations.

Concepts that sound good in the halls of a think tank sometimes turn bumpy in the real world. The mission of a private road operator is to maximize profit for investors. The mission of a state transportation agency is to maximize mobility in the public interest. In Orange County, those missions collided along Hwy. 91, and the public lost. What tended to benefit private road builders and real estate developers did not benefit mobility or the public interest.

"A polite form of highway robbery" is how California Attorney General Bill Lockyer described the Hwy. 91 privatization. "A horrible decision" is how an Orange County official described it to us last week. It's the duty of overseers in Minnesota to reduce that possibility here -- to hold the Pawlenty administration accountable for its stewardship of the state's transportation assets.

Contact for more info: Jim Erkel, Land Use and Transportation Director
(651) 223-5969

© 2004 Minneapolis Star Tribune