We Want Our Cake And Eat It Too

The Star has a story this morning about Gov. Mitch Daniels protesting a new federal highway funding bill making its way through Congress that would reduce funding to states which lease part of their interstate highway system to a private entity. Several years ago, Daniels pushed through the legislature a 75-year lease of the Indiana Toll Road for a whopping $3.8 billion, most of which will be consumed by existing and proposed highway projects undertaken before the end of Daniels' 8 years in office. Indiana has been allocated federal highway funding as if it still maintained the toll road, but that responsibility now falls to the private operator, which still collects tolls just like the state did to help pay for those maintenance costs. Indiana would lose about $42 million a year in highway funding if the federal highway bill is approved as it passed the Senate and Daniels believes that's unfair.

"This is a state that gets screwed every year anyway" on federal highway funding. "Now they'd reduce it further," Daniels told reporters.

Sen. Jeff Bingaman, D-N.M., argues that Indiana is fleecing federal taxpayers because it got $3.8 billion to lease the toll road for 75 years, yet it still receives federal funds to help maintain those 157 miles of highway that the private consortium must now maintain through the tolls collected.

"I don't believe that states should be allowed to use their existing publicly funded highways as a virtual ATM, leaving the rest of this country's drivers to foot the bill," Bingaman wrote in an opinion piece published by The Washington Post in May.

Daniels said having a private entity collect tolls and maintain the road is not different from what the state was doing when it operated the road while still receiving federal highway dollars for it.

"Why were they sending it all those other years?" Daniels, a Republican, said about Bingaman's logic. "Fifty years and nobody complained."

Daniels' position is backed by the U.S. Chamber of Commerce and the American Road and Transportation Builders Association. Bingaman's amendment has the support of the AAA motor club, the American Trucking Associations and the American Highway Users Alliance.

Colorado and Illinois are the only other states that would be immediately affected, but other states are looking at public-private partnerships. Daniels said they need to be encouraged because there's not enough funding at the state and federal levels to meet infrastructure needs.

The federal highway program is funded primarily through the 18.4 cents-per-gallon federal gas tax, which hasn't increased since 1993. Revenues haven't kept up with demand, in part because costs have increased and vehicles have become more fuel efficient, so less tax revenue is generated for miles traveled . . .

On the one hand, I can see Daniels' argument but on the other hand folks were told that paying tolls on highways like the Indiana Toll Road was only a temporary thing. People were initially told that once the bonds were paid off to pay for the initial construction cost of the toll road the tolls would go away and the cost of maintaining the highway would be paid for out of the same funds other interstate highways are paid. It became clear before Indiana sold off its rights to the Indiana Toll Road that those tolls were going to be permanently levied to pay to maintain the highway. Out-of-state motorists have no choice but to pay those tolls when traveling through Indiana to reach their destination while they can travel interstate highways in most other parts of the country without paying any tolls. Is that fair?