By Benita M. Dodd
Any elected official who proposes raising gas taxes or fees to fund transportation infrastructure needs in Georgia is probably not planning on re-election. Yet every policy-maker knows the state needs an innovative approach and deep pockets to plan for a future without mind-boggling traffic congestion.
But innovation is nothing new to State Transportation Board member Garland Pinholster, no stranger to controversy and never one to back down from a challenge. As Oglethorpe University’s basketball coach, he scheduled the first integrated college basketball game in Georgia 45 years ago, against Rhode Island. In a shocking upset, the “little guy,” Oglethorpe, won 64-47.
He’s been a soldier, author, tennis champ, businessman and state legislator. And with the characteristic bluntness that has earned him a “can-do” reputation throughout, “Coach” Pinholster made clear recently that he intends to map a new course in state transportation policy. It’s one that explores public-private partnerships and long-term concessions to provide the big money for metro Atlanta’s big plans and end what he calls a “crazy quilt” of projects.
“We cannot raise the money in-house or with taxes,” Pinholster conceded at a June meeting of the Transportation Board’s Public/Private Initiatives Committee. If the state does raise taxes, he says, that could fund statewide projects. Metro Atlanta’s projects and costs are piling up, but as the Georgia Public Policy Foundation and Reason Foundation surge ahead with research on congestion relief, Pinholster says, he’s afraid “Learning is getting way ahead of doing.”
The two foundations recently proposed a massive plan including an express network of high-occupancy toll (HOT) lanes instead of planned high-occupancy vehicle (HOV) lanes; a tunnel from the southern end of Georgia 400 to I-20 and on to I-675; an east-west toll route from Lakewood Freeway to I-20, and a truck toll tunnel that would go under downtown Atlanta. Pinholster’s Transportation Board colleague David Doss has proposed a one-cent statewide transportation sales tax for the next 10 years to raise $22 billion, supplemented by tolls and private sector funds for his “Big Idea” statewide transportation plan that, like the foundations’, includes converting metro HOV lanes to HOT lanes and building the tunnels.
Pinholster wants the Georgia Department of Transportation to actively solicit companies willing and large enough to finance the entire metro area in a totally comprehensive plan. He’s afraid – and rightfully so – that project-by-project development will be time-consuming and lead to cherry-picking.
Public-private initiatives are no cure-all; in fact, with just 3 percent of lane miles tolled in this nation, it’s quite clear that the vast majority of infrastructure maintenance, operations and improvements must continue to be funded by traditional methods, however unpopular they are to taxpayers and motorists.
But increasingly, with funding shortfalls increasing at the federal, state and local levels, PPIs are in the toolbox. They can expedite projects; lead to innovative toll collection methods that provide returns on investment and improve traffic flow, and add accountability and quality by offering investors a long-term interest in a project’s success. The private investor gets a long-term license to operate a toll road, the state gets access to new sources of capital and expedited infrastructure investment while protecting the public interest.
Long-term toll concession agreements are fairly new to the United States, so probably the deepest pockets will be international joint ventures (Europe and Australia have proven track records). But that is no drawback in a global economy, and attracting capital and international expertise to metro Atlanta’s transportation challenges helps ensure success in this relatively new arena.
These contracts are leases, not sales, of public property, and this becomes a partnership in which each side must contribute. The state handles the regulatory aspects (right of way, permits, enforcement, for example) and the private sector negotiates with the state the terms of design, finance, rate of return, construction and operation of the project. The private sector also is aware that tolls must be set at what the market will bear for the project to succeed.
A major challenge facing a state-based think tank that promotes market-oriented solutions and limited government is that government bureaucracy is inherently territorial and entrenched. Success in innovation requires a good-faith effort from the public sector to concede that it must accede “territory” in order to achieve the public interest, then to ensure that the public interest is protected. (That means also ensuring viable alternatives remain for motorists who opt for “free” versus “faster” travel.)
Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (July 27, 2007). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.