Perspective

Private roads are dead end for Florida

By A TIMES EDITORIAL
Published September 30, 2007

In another attempt to reconcile his ambitions with his tax phobia, Gov. Charlie Crist is considering whether to essentially lease the Sunshine Skyway Bridge to pay for new professors at the University of Florida. As a financing plan for Florida's future, auctioning off public assets like roads is a dead end.

Crist told a reporter recently that his concept, which is to lease public roads and bridges to private companies who would be paid back through higher tolls, could amount to a "very good opportunity" for the state. He added: "I'm just trying to be innovative and not raise taxes."

The governor makes the concept sound as though it were free to Floridians, but it is anything but. The Orlando Sentinel looked at briefings provided the governor's office by a New York investment firm and found that motorists would get stuck with the bills. For granting a 50-year lease on Alligator Alley, for example, the state might be expected to receive an up-front payment of between $504-million and $1.3-billion. In return, the company buying the lease would get to raise tolls from $2.50 to $10 within a decade. The Skyway Bridge might bring in a similar amount of money up front, but the toll could be raised from $1 to $5.

The math works only if the state allows the companies to significantly raise tolls, which itself raises a question about privatization. If there are profits to be made by raising tolls, why wouldn't the state do so on its own? The state could borrow money at a cheaper rate than private firms and wouldn't need pay shareholders a 20 percent return.

The reason traces back to the pinched politics that drive Crist to seek financial alternatives. If the state were to increase the tolls directly, Crist would consider it a form of a tax increase in much the same way he spurns tuition increases. But if a private company raises the tolls, politicians gain a measure of deniability.

Georgia is among the states that are pursuing private roads as a way to meet transportation challenges. But its early efforts show that not everyone is easily fooled. It tried to sell a road between Atlanta to Athens until people found out the price would be a round-trip toll of roughly $10. Now Georgia is focusing its privatization effort on new roads.

Crist appears to be considering the possibility of selling control of existing roads and bridges whose construction in many cases has already been paid off by tolls. Tolls could be increased for those motorists for uses wholly unrelated to transportation, such as education. If tolls are the ultimate user fee, what happens when they are put to an entirely different use?

Putting public thoroughfares in the hands of private entrepreneurs can also lead to some untenable trade-offs. A new U.S. Public Interest Research Group report documents the noncompete clauses that have shown up in deals in other states. As an example, one Colorado road deal actually required nearby cities to add stop lights to slow traffic on competing roadways, lest the company lose potential toll revenue to free roads.

The practice of private roads traces largely to developing nations, where poor governments are unable to borrow the capital on their own. That's not the case in Florida, which is why privatization seems only to add a layer of political insulation and private profit.

[Last modified October 1, 2007, 08:47:17]