The National Governors Association adopted a policy opposing federal restrictions on public-private partnerships after a multiyear transportation authorization bill introduced in the House proposed creating a federal office to oversee see P3s on highways that receive federal aid.
The bill, introduced in late June by House Transportation Committee chairman James L. Oberstar, D-Minn., would create an Office of Public Benefit within the U.S. Department of Transportation.
The office would serve as a one-stop shop for public-private partnerships, providing technical assistance to states that hope to enter into P3s.
However, the office would have the authority to approve or disapprove such projects and their toll rates and that has raised the ire of state officials.
The proposal also has drawn concerns from some in the transportation community, particularly tolling proponents who believe the office would have too much power and could discourage P3s.
One critic is former NGA chairman Gov. Edward G. Rendell of Pennsylvania, who called the proposal “dangerous” during a P3 conference here last month. He said the Office of Public Benefit would have too much control over states’ decisions about tolling.
The NGA in July adopted a policy on surface transportation that appears to directly contradict Oberstar’s proposal.
“Governors ... oppose any federal restrictions on states’ ability to pursue public-private partnership arrangements to address their own infrastructure needs,” the policy states.
“Governors support the removal of federal restrictions on states’ authority to toll federally aided highways. State and local authorities, as the owners and operators of the surface transportation system, must determine the appropriate level of private sector participation in their surface transportation programs.”
The NGA also said it opposes any effort by the federal government to put conditions on federal aid based on the level of private-sector participation in a state’s surface transportation program.
“States must remain responsible for financing, in part, but retain primary authority for tolling, public-private partnerships, and other demand-side strategies,” the group said.
The Federal Highway Administration already wields considerable power over states’ tolling decisions.
While Interstate highways are generally toll-free and would remain so under Oberstar’s bill, there are already 2,900 miles of tolled highways and bridges in the 46,730-mile Interstate system.
The current transportation law — the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users, or SAFETEA-LU — that Oberstar’s bill would replace gives the federal government authority to approve tolling projects on federal-aid highways.
But a major difference between the current law and Oberstar’s bill is that the FHWA currently cannot tell states what to charge for tolls.
One tolling program that the agency already oversees is the value-pricing pilot program, under which there were dozens of pilot projects in 15 states as of June, including high-occupancy toll lanes, variable-priced tolls, bridge tolls, and express lanes.
Separately, more than 70 tolling agreements that were federally approved were in effect in 24 states and Puerto Rico as of December 2007.
However, the FHWA last year denied an application from the Pennsylvania Turnpike Commission to toll Interstate 80 as part of another pilot program.
Joe Brimmeier, the turnpike’s chief, responded by warning that the FHWA’s decision “may well eliminate a critical tool in an already-limited transportation funding toolbox — not only for Pennsylvania but for all states facing a transportation-funding crunch.”