Monday, December 11, 2006
Privatization Good for Roads: Why Not Transit?
The Governor has set a deadline of December 22nd for accepting information from private companies interested in leasing and/or operating the Pennsylvania Turnpike. Privatizing the Turnpike is an idea recently floated by the Governor’s Transportation Funding and Reform Commission (TFRC), which recommended that the use of private-public partnerships should “be pursued aggressively”.
That’s because the funding problems facing the state’s road and bridge infrastructure and mass transit systems is daunting, to say the least. In all, the TFRC has recommended about $1.7 billion in net new spending per year to address transportation issues. Increases in taxes on sales, gasoline, realty transfers as well as a boost in motorist fees have all been mentioned as part of the mix for raising the needed revenues.
Two recent sales of toll roads show the positive benefits: the government gets cash up front or in allotments, and allows the private sector to take responsibility for an asset that may not need to be run by the government. A toll road in northern Indiana sold for $3.8 billion, allowing for “the largest building program in the state’s history while transferring the burden and the risk of running the toll road to a private firm”, according to that state’s Governor. Meanwhile, the Chicago Skyway is currently being leased for $1.8 billion. The mayor of that City noted that “running a toll road is not a core function of City government”.
So the idea of selling or leasing the Turnpike represents some outside-the-box thinking for Pennsylvania; the timetable is aggressive; it would relieve the impending tax burden; and it has been proven to work in other places.
Too bad there is not similar enthusiasm for bringing this thinking into the public transit arena.
Allowing private operators to compete for an opportunity to operate public transit service in Pittsburgh and Philadelphia would definitely be a break with the past in the Commonwealth. It would help rein in the spiraling labor costs that are threatening the viability of transit. As far as precedent is concerned, we have documented the positive results of contracting out has brought to Denver and in large urban areas around the world.
The TFRC’s ideas on transit contracting don’t rise to the level of privatizing the Turnpike. The panel recommended that PAT and SEPTA be mandated to explore contracting, and we can easily predict how that will be received by the transit unions and the elected office holders that support them.
So when the Governor was quoted as saying “We are looking at all options. Nothing is off the table,” when trying to make the tricky decision between a higher gas tax, higher motorist fees, or the other taxes presented by the report, it is too bad that it appears that an idea for improving the effectiveness of the state’s public transit systems is off the table. Indeed, the City of Pittsburgh could take a lesson from the Governor’s willingness to consider privatization as a way of dealing with its problems.
Simply finding a dedicated revenue source for transit will placate the unions and transit advocates, but taxpayers deserve better.
That’s because the funding problems facing the state’s road and bridge infrastructure and mass transit systems is daunting, to say the least. In all, the TFRC has recommended about $1.7 billion in net new spending per year to address transportation issues. Increases in taxes on sales, gasoline, realty transfers as well as a boost in motorist fees have all been mentioned as part of the mix for raising the needed revenues.
Two recent sales of toll roads show the positive benefits: the government gets cash up front or in allotments, and allows the private sector to take responsibility for an asset that may not need to be run by the government. A toll road in northern Indiana sold for $3.8 billion, allowing for “the largest building program in the state’s history while transferring the burden and the risk of running the toll road to a private firm”, according to that state’s Governor. Meanwhile, the Chicago Skyway is currently being leased for $1.8 billion. The mayor of that City noted that “running a toll road is not a core function of City government”.
So the idea of selling or leasing the Turnpike represents some outside-the-box thinking for Pennsylvania; the timetable is aggressive; it would relieve the impending tax burden; and it has been proven to work in other places.
Too bad there is not similar enthusiasm for bringing this thinking into the public transit arena.
Allowing private operators to compete for an opportunity to operate public transit service in Pittsburgh and Philadelphia would definitely be a break with the past in the Commonwealth. It would help rein in the spiraling labor costs that are threatening the viability of transit. As far as precedent is concerned, we have documented the positive results of contracting out has brought to Denver and in large urban areas around the world.
The TFRC’s ideas on transit contracting don’t rise to the level of privatizing the Turnpike. The panel recommended that PAT and SEPTA be mandated to explore contracting, and we can easily predict how that will be received by the transit unions and the elected office holders that support them.
So when the Governor was quoted as saying “We are looking at all options. Nothing is off the table,” when trying to make the tricky decision between a higher gas tax, higher motorist fees, or the other taxes presented by the report, it is too bad that it appears that an idea for improving the effectiveness of the state’s public transit systems is off the table. Indeed, the City of Pittsburgh could take a lesson from the Governor’s willingness to consider privatization as a way of dealing with its problems.
Simply finding a dedicated revenue source for transit will placate the unions and transit advocates, but taxpayers deserve better.
Comments:
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The rush and deadline of Dec 22 is a real worry for me.
Why be so quick? Haste makes waste.
We can have a public discussion and issues debates for a couple of months. We can take some polls. We can have a few citizen focus groups -- sorta like a jury -- to get a deliberate debate and decision.
I worry too about this sell off being something like the sale of the Water & Sewer Authority. Is it just a quick trick for cash that won't really help for the long-term future?
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Why be so quick? Haste makes waste.
We can have a public discussion and issues debates for a couple of months. We can take some polls. We can have a few citizen focus groups -- sorta like a jury -- to get a deliberate debate and decision.
I worry too about this sell off being something like the sale of the Water & Sewer Authority. Is it just a quick trick for cash that won't really help for the long-term future?
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