Senate staff and state officials worried during a conference here last week that legislation pending before the House Transportation Committee would go too far by creating a federal office with the power to reject public-private partnership agreements for highways that received federal aid.
The bill introduced this summer by committee chairman James L. Oberstar, D-Minn., would establish an Office of Public Benefit within the Federal Highway Administration that would be charged with "protection of the public interest" with regard to toll projects and P3 agreements on highways that receive federal funding.
The office would have its own department head chosen by the secretary of transportation. In addition to its general public-interest defender role, the office would have specific review and veto powers over proposed toll rates, toll rate changes, and "any other activities that the secretary determines necessary" under laws pertaining to toll revenue uses. The office would have authority over such plans by states as well as metropolitan areas.
The proposal received criticism from Republican staffers and a lack of outright support from a Democratic staffer on a panel Friday at a P3 conference that was sponsored by the American Road and Transportation Builders Association. Their apprehension echoed that of state officials. Pennsylvania Gov. Edward G. Rendell, a Democrat, said the day before that the office would wield too much power over states.
The public benefit office would "set us back pretty significantly in terms of tolling," said Jim Tymon, a Republican staffer on the House Transportation committee. "I do think there could be a role for [the] federal government" to provide technical assistance on P3s, but not to veto states' agreements, he said.
Kathy Dedrick, a Democratic staffer for the Senate Environment and Public Works Committee, which is drafting the Senate's multi-year transportation proposal, said the OPB is "not necessarily the way we would structure our bill," but "we'll see."
Louisiana Transportation Secretary William D. Ankner said the proposal for a federal P3 office scares him, partly because of his experience with stringent and inconsistently applied reporting requirements for stimulus funding.
"God help us if we get into the Office of Public Benefit and we have you and the administration being unable to even define the terms" of acceptable P3 agreements, he said. The office "scares the hell out of us, too," Tymon said.
James O'Keefe, Senate Environment and Public Works minority staffer added that by pushing P3s so hard, the Bush administration "got a kind of counter-reaction from a lot of people." Deals that were controversial or unpopular, such as the Chicago Skyway whose toll revenues were diverted for non-transportation uses, turned people off to privatization, he said.
In addition, Dedrick said that "all options have to be on the table" with regard to funding sources for the next multi-year bill. Revenue options that have been discussed in the transportation policy world have included a controversial gasoline tax increase.