The devil in the details

Congress should get the reauthorization bill right before it is passed

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Now that the U.S. senators and others have the time to read the Manager’s Amendment to the surface transportation reauthorization bill passed by the Senate last month, it may be time to pause for reflection.

 

The last-minute, 221-page Manager’s Amendment apparently contained several measures that might jeopardize one of the few ideas the government has come up with to meet transportation infrastructure’s future needs. Several provisions would “reduce the financial attractiveness of [toll] concessions to private investors,” according to Robert Poole of the Reason Foundation in Surface Transportation Innovations. One step would forbid states from using accelerated depreciation like other industries. Another would forbid them from using tax-exempt private activity bonds. A third would reduce a state’s allocation of federal highway funding by subtracting highway miles under private concession from the state’s total highway miles.

 

Poole noted 22 public-private partnerships at some stage of development in the U.S., which is already behind the European curve of taking advantage of this funding strategy.

 

I seem to recall a former transportation secretary saying the federal government should encourage private investment in public infrastructure. Private investment might be a partial cure for the gap between the funding our roads and bridges need and the funding the government can actually provide.

 

This may not be the right time to discourage private industry from maintaining a highway and letting public money be invested in other highways.

 

The Building America’s Future (BAF) coalition has sent a letter to the senators who voted for the anti-long-term toll concession measures.

 

Ken Orski, in Innovation NewsBriefs, quoted BAF's Director of Policy Kerry O'Hare as saying, "Taken together or individually, these provisions would have a chilling effect upon future private investment in infrastructure."

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