Release: New Report Outlines Dangers of Road Privitization

Florida PIRG

Tallahassee – Deals to privatize public toll roads, such as those proposed last week by Governor Crist, typically fail to protect the public, according to a new report released by the Florida Public Interest Research Group (Florida PIRG). The report explains seven basic protections that are required to ensure that these toll road sell-offs would benefit the public over the long term. None of these safeguards or assurances are currently in place.

“The public interest must stand at the forefront of any potential road privatization deal,” said Brad Ashwell, Advocate for Florida PIRG. “These deals use a private middle man to deliver a big upfront payment in return for decades of escalating tolls from drivers. Before we consider such sell offs, we need to be sure that the public wouldn’t lose control of these roads, that the public couldn’t deliver the same value itself, and that the process is fully transparent and accountable.”

Gov. Crist is reportedly exploring ways to privatize existing toll roads and bridges as a way to close the projected $2.5 billion budget shortfall over the coming two years. Gov. Crist has proposed 50-year leases on Florida toll roads such as Pinellas Bayway, Alligator Alley, and the Skyway in return for upfront cash. The Crist Administration could use the cash to close its immediate budget shortfall, but Florida drivers would pay higher tolls for generations and the public would lose out on those revenues.

The report from Florida PIRG describes how New Jersey, Pennsylvania, and Texas recently backed off from private road deals. New Jersey’s Governor Jon Corzine had previously headed Goldman Sachs, a company that earned millions in road privatization consulting fees in Chicago and Indiana. After a lengthy consideration of whether to privatize New Jersey’s own toll roads, Gov. Corzine concluded that it made more financial sense for the public toll authority to itself borrow money against future toll hikes. Texas placed a two-year moratorium on private deals after the public toll authority showed it could deliver billions more in value with the same toll hikes. Massachusetts passed a law in 1993 that ensures any private deal must demonstrate that it saves the public value in the long term.

“There’s nothing innovative or magic about these proposals,” explained Ashwell. “It’s just borrowing money from big future toll hikes. If elected officials believe they must raise tolls, then they should make that case to the public, rather than outsourcing the political will and the revenues to some company in return for a short term wad of cash.”

According to the report, Road Privatization: Explaining the Trend, Assessing the Facts, and Protecting the Public, toll road privatization proposals must include seven basic safeguards for the public. These include assurances that the public couldn’t secure comparable payouts by borrowing against the same toll increases promised to private companies. Public control must also be retained over transportation planning and management decisions. The report outlines further bottom-line protections in terms of transparency of the process, road safety, and accountability of law makers to the public.