CHICAGO — Missouri transportation officials are seeking legislative authority to turn Interstate 70 into a toll road to fund a $2 billion to $4 billion rebuilding and expansion of the aging highway, possibly through a pubic-private partnership.
Sen. Mike Kehoe, R-Jefferson City, filed legislation on behalf of the Missouri Department of Transportation, but the department has yet to find a sponsor in the House.
The bill would authorize the collection of tolls and also enables the department to enter into a P3 to fund the project if it chooses.
“We want to have the most flexibility to be able to use a public-private partnership and private funding,” said the department’s chief financial officer, Roberta Broeker. “We think there is a lot of value brought by the innovations of a P3.”
I-70 traverses Missouri for 252 miles, linking Kansas City and St. Louis.
The department has crafted three preliminary plans for legislative discussion. They include a $4 billion rebuilding and expansion of the four-lane highway to eight lanes, with two lanes in each direction dedicated to passenger vehicles and two dedicated truck lanes.
A second scenario calls for a $3 billion plan with two new lanes, one in each direction, and a wide median.
A third plan costing $2 billion would add a lane in each direction with no median. The cost is significantly lower for the third proposal because the state owns sufficient right-of-way to accommodate the added lanes.
“We want people to understand what the possibilities are and the cost of the various options,” Broeker said. “The more project you build, the higher the toll.”
With the department’s bonding capacity tapped out, transportation director Kevin Keith began pushing the idea of converting I-70 into a toll road last year. Broeker said the 60-year-old highway is one of oldest in the nation, was built with a useful life of 25 years in mind, and is overcrowded.
Lawmakers have responded positively to the discussion over rebuilding the highway, but have not said whether they believe the measure could pass in the current session, according to published reports.
“It’s really jump-started the conversation about how you fund transportation in the state and country,” Broeker said. “If you don’t like the idea of tolls, then do you want higher gas taxes or higher sales taxes?”
There has been little political will in the state to raise the gas tax which has held at 17 cents per gallon since 1996.
The state has non-highway P3 authorizing legislation on the books, but so far none allows for their use on highway projects.
The department is pressing tolls as the most viable option to fund the project amid stagnant federal aid and its exhaustion of available state resources.
Facing a funding crisis, the Missouri Highways and Transportation Commission, which oversees the department, last year adopted a five-year budget plan that eliminated more than 1,000 positions and shuttered facilities to save $500 million for project funding.
The highway commission returned to the ranks of frequent borrowers in 2000 with a $200 million sale, its first issuance of road revenue bonds since 1927.
The issue marked the first installment of debt to finance a then-five-year capital program that the General Assembly approved $2 billion of new debt issuance to support.
Voters in 2004 then bolstered the commission’s borrowing capacity by approving Amendment 3.
The constitutional amendment allowed the commission to accelerate road projects by ending the diversion of some road-related taxes to the general fund.
The commission exhausted the Amendment 3 bonding capacity to fund a $2.2 billion, five-year capital program in 2009.
The commission has leveraged its federal grants but it has tapped that capacity under the high internal-coverage limits it abides by.
The commission has $928 million of outstanding grant anticipation bonds and has issued $785 million of Garvee bonds in recent years to finance its Safe and Sound Bridge program, and to cover its share of a new bridge span across the Mississippi River.
The commission had originally intended to fund the bridge program with a first-of-its-kind plan for debt under a $15 billion federal pilot program.
The program allows private companies to benefit from the issuance of private-activity bonds to finance construction of transportation projects and rail-to-truck freight facilities.
The worsening credit crunch in 2008 sapped any potential financial benefits of the program as the costs for the contractor to raise its private-equity contribution rose.
The commission has issued a total of $4.3 billion of new-money and refunding bonds in 18 issues since 2000, according to Thomson Reuters.
Ahead of a 2010 refunding, all three rating agencies affirmed the commission’s existing ratings.
The road bonds, depending on their lien, are rated between double-A and triple-A.