VACostCutting

Wednesday, February 01, 2006

"Major Moves"

I'm posting from Indiana again today, where the Indiana House just passed a sweeping reform transportation reform package called "Major Moves." The bill will move to the Senate and should be signed into law no later than April 1.

Why is this interesting to the Commonwealth. Well, to use the Governor's words it shows that there is "a better way." State's can fully fund transportation without raising taxes.

The centerpiece of Major Moves is a lease concession of the Indiana Toll Road which is netting the state some $3.8 billion. This is on top of the $4.4 billion the contractor has agreed to invest over the life of the concession. Furthermore, the state will save an additional $94 million in annual operating and debt service costs. What's more, they expect to raise about $900 million in interest from the cash in the bank. Over all its expected to be about a $100 billion benefit to the state -- and a fully funded transportation plan for the next 10 years!

We need to look at the full picture when we're talking about public-private partnerships, as is done above. Yes, a Dulles Toll Road lease will bring in at least $1 billion - but what investments will the contractor be making on behalf of the state? How much do we save on operating? etc. Doing so will paint a better picture of the opportunities and impact that PPP's can have.

Quickly back to Indiana, the alternative to Major Moves was a quadrupling of the gas tax. Fortunately for Hoosiers the state house didn't want any part of that.

So, what's the lesson. The Governor is right, there is a better way. My Bacon's Rebellion piece this week highlights some things we should do before we talk about raising taxes. Perhaps most importantly is leveraging PPP's and any new revenue that is generated because of them. These ideas are not new to this page, editorial pages, or blogs throughout the state - we do need to keep beating the drum. Fortunately many of the pieces that are needed are already being debated, including Del. Wardrup's concessions bill.

I believe the Commonwealth is blessed with fantastic leadership. State after state is showing us the way, the better way, without new taxes to fund transportation. If Indiana can do it, so can we.

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