WASHINGTON — Indiana Gov. Mitch Daniels made the rounds in the nation’s capitol Thursday, urging lawmakers to pass a transportation bill friendly to public-private partnerships and telling reporters that he fears there might not be a bill at all.
Daniels is one of the top political advocates for P3s, and his state is home to a prominent example in the Indiana Toll Road, leased in 2006 for $3.8 billion. The Republican governor told members of Congress and press at a roundtable discussion hosted by the Reason Foundation that language in the Senate transportation bill authored by Sen. Jeff Bingaman, D-N.M., would only scare off investors and contribute to the United States’ slowness to embrace innovative financing solutions.
The Bingaman provision that most raised Daniels’ ire would reduce federal road funding to states that lease public roads to private companies, by prohibiting the miles that make up such roads from being factored into the federal funding allocation formula.
Daniels and Bingaman crossed swords on the Washington Post editorial pages last month, with Bingaman accusing Indiana of selling the toll road as a short-term solution while making taxpayers pay for the same road twice. Daniels answered that Bingaman’s article was “conceptually backward” because the road was built before the advent of the federal interstate highway system.
Daniels urged lawmakers, including House and Senate conference committee co-chair Rep. John Mica, R-Fla., to oppose the Bingaman provision and allow the United States to catch up to European and Asian countries, which build a far higher percentage of infrastructure projects with help from private money.
“We are the most backward on this one subject,” Daniels said during the roundtable.
While Daniels admitted that few Democrats dropped in during his visit to the Hill, he said that feedback from those members he did talk to indicated that odds are “50-50 that there’d be a bill at all.”
That’s a sharp contrast from the statements made recently by some conferees trying to negotiate a final bill from House and Senate versions. Conference committee chairwoman Sen. Barbara Boxer, D-Calif., has said over the past several days that conferees have discovered a revenue solution that could draw widespread support.
Indiana routinely gets “shafted” by the federal funding formula, Daniels said, and plans to continue utilizing P3s. Reason Foundation senior transportation analyst Shirley Ybarra, a former secretary of transportation of Virginia, praised Daniels as a trailblazer.
“He has led the way,” she said.
The governor said he expects continued investor interest, though investors in the Indiana Toll Road admitted in 2011 financial statements that there was a risk they might not meet debt service requirements through the 2015 maturity date. Daniels said he was “sorry” that those investors had to take a “haircut” on that deal, which he described as an unspeakably good one for Indiana.
“There will never be another one like it,” he said of the lease.
Indiana has reinvested all of the $3.8 billion it got from the toll road lease into other transportation projects, Daniels said. The state is involved in a $2.4 billion bridge spanning the Ohio River, a P3 project jointly financed with Kentucky, and plans other major projects as well. The gas tax, even if raised, will never be enough to pay for infrastructure, he said.
The current highway funding authorization law expires at the end of June.