November 15, 2008

The Big Idea That Nobody's Having

Justin Katz

Hey, Rhode Islanders: That deferred tax increase known as "transportation bonds" (and claiming all those wonderful federal tax dollars) to which you just assented? Not enough:

A special state panel yesterday discussed several ideas to raise money to fix the state's roads and bridges, from tolls on Route 95 and the Sakonnet River bridge to increases in the gas tax and higher traffic fines.

But none of the suggestions would come close to raising the $300 million a year the state Department of Transportation says it needs to catch up from years of neglect.

On a separate front, Jerome F. Williams, the governor's director of administration, offered the administration's first plan for covering the budget deficit that threatens to force major cutbacks in bus service or even a shutdown of the Rhode Island Public Transit Authority. ...

During the first year, the plan would impose a new wholesale tax on fuel for motor vehicles, raising $43 million per year. It would also increase vehicle registration fees by $10 per year,raising $22.9 million, and increase the penalties for traffic violations by 20 percent, raising $1.8 million per year. The difference would come from smaller increases in other fees. ...

In later years, Williams would add toll boothson Route 95 near the Connecticut border , raising another $40 million.

While reading the article, I saw a brief glimmer of hope that officials at least had brought some of the correct answers into the conversation — even if only to dismiss them:

Williams' plan avoids a number of politically difficult possibilities which the panel has talked about ....

But then I read on:

... such as imposing tolls on the planned new Sakonnet River Bridge and on the Mt. Hope Bridge, and raising the state sales tax.

Yes, the fatal thinking continues, including such bad old habits as setting government goals to merely "try and get through this year" and promising that tax increases would only be "for a short period of time."

How about this: Given the central importance of infrastructure and public transportation and the utter economic insanity of increasing Rhode Island's taxes and fees, let's redirect funds that are currently allocated for purposes that may help a few but are proving to harm us all over the long run. (I refer, of course, to the state's welfare and union sieves.) Hey, we can even promise that the cuts will only be "for a short period of time" — namely, until the state can actually afford to pay for the programs and benefits.

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The thieving bastards in the General Assembly will not get it until the state files for bankruptcy. Let's get on with it. The best thing that could happen.

Posted by: Jim at November 15, 2008 3:36 PM

Who is John Galt?

An honest, productive guy who looked around Rhode Island, realized that the parasitic class was now the majority, and left for another state from which he could, over the next several years, watch from afar Rhode Island's slow-motion fiscal and economic collapse.

Posted by: Tom W at November 15, 2008 5:08 PM

I debated this ad nauseum with Walsh and Sgourous on the other blog a few months ago.
The bottom line is that it is ILLEGAL for a state to toll an Interstate highway built with federal funds-like RI's stretch of 95. There are a few pilot programs which allow high-occupancy lanes to be constructed and tolled but a state just can't "put up a toll" on an Interstate.
Progressive fool Ed Rendell just tried to do this on I-80 and the feds shot him down-quickly. If you really want to piss off Walsh and Sgouros ask them to name a single Interstate which has been closed to free traffic. You will hear all kinds of verbal dynastics about how "it can be done" and "we can do it"-but not the name of a single Interstate. Because it is illegal!

U.S. says no to Interstate 80 tolls
Rendell: Privatize turnpike or face crisis
Friday, September 12, 2008
By Tom Barnes, Post-Gazette Harrisburg Bureau

HARRISBURG -- The federal government's rejection yesterday of a plan to put tolls on Interstate 80 means Pennsylvania is facing a transportation "crisis," and heightens the need for the Legislature to quickly approve a private bid to operate the Pennsylvania Turnpike, Gov. Ed Rendell said.

Mr. Rendell said yesterday he doesn't think the $12.8 billion lease offer from a consortium of New York-based Citigroup and the Spanish firm Abertis "will stay on the table past Jan. 1. It would be playing Russian roulette for the Legislature not to act [this fall] on the Abertis proposal."

He said the offer to lease the turnpike for 75 years is the only alternative left for the state to raise the $1 billion a year it needs to fix crumbling roads and bridges and to bail out struggling mass transit agencies, including the Port Authority of Allegheny County.

Mr. Rendell said he talked yesterday afternoon by phone with U.S. Transportation Secretary Mary Peters, who rejected the Pennsylvania Turnpike Commission's application to put first-time tolls on I-80 starting in mid-2010.

She told him the proposal didn't meet federal criteria for new tolling on interstate highways, such as a requirement that all the money generated be used for improving I-80 alone and not for other roads.

In a statement, Federal Highway Administrator Tom Madison said, "We are legally bound to ensure applications for this program meet all congressionally mandated requirements. We are regrettably unable to approve this application."

Officials and groups opposing the tolls, such as U.S. Reps. John Peterson and Phil English, the Harrisburg-based Commonwealth Foundation and a truckers group called the Owner-Operator Independent Drivers Association, were jubilant.

"I have repeatedly stated that the tolling of Interstate 80 would kill the future economic viability" of Pennsylvania, Mr. Peterson said. "[Yesterday] the Department of Transportation agreed. It's time for the governor and the state Legislature to stop using highway funds for mass transit and other non-highway-related issues and get serious about fixing our roads and bridges.''

Commonwealth Foundation head Matthew Brouillette said the rejection of the tolling plan is a sharp blow to the Turnpike Commission, which he called "a nefarious and scandal-laden" agency. Many critics have said that turnpike decisions on hiring and contracts are often based on political connections.

But the commission has many friends in the Legislature and will certainly fight any attempt to approve a private lease. Leasing the turnpike to Citi-Abertis would almost certainly put the politically powerful commission out of business. If the I-80 tolls had been approved, the turnpike commission's empire would have doubled in size, as it would have run I-80 as well as the 68-year-old turnpike.

Turnpike Commission officials declined comment yesterday until they'd been "officially notified by the Federal Highway Administration" of the reasons.

The tolls on I-80 were a key component of Act 44 of 2007, which was designed to raise nearly $1 billion a year, starting in fiscal 2010-11, to boost transportation systems.

The other component of Act 44 is a 25 percent increase in tolls on the turnpike, which is set to take effect in January. But without the I-80 tolls, Mr. Rendell said, a $450 million-a-year hole will be blown in the Act 44 funding scheme in two years, so an alternative must be found.

The loss of the I-80 toll revenue won't be immediate because Act 44 called on the Turnpike Commission to float $850 million in bonds this fiscal year and another $900 million in bonds in fiscal 2009-10.

The only long-term alternative for transportation funding that Mr. Rendell knows about is the 75-year lease of the turnpike to Citi-Abertis. The offer includes $12.8 billion up front, which Mr. Rendell said would be invested. He expects that to generate about $1 billion a year.

Citi-Abertis officials claimed their offer actually amounts to more than $21 billion, with $4.2 billion in new taxes for the state and nearly $5.5 billion in turnpike improvements added to the one-time upfront fee.

Mr. Rendell said the only other transportation funding idea would be an 8.5 cent-per-gallon increase in the state's gasoline tax (from 32 cents to 40.5 cents per gallon), but he said that is unfair to drivers and politically impossible.

Posted by: Mike at November 16, 2008 2:02 PM
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