William B. Cassidy, Senior Editor | Jun 01, 2012 10:58AM EDT
Indiana Gov. Mitch Daniels, architect of one of the largest public-private partnerships in U.S. history, is attacking provisions of the Senate transportation reauthorization bill that he said would punish states pursuing such deals.
House-Senate conferees “might put a transportation bill out that as I see it would have some real backward features,” Daniels said at a press roundtable sponsored by the Reason Foundation, a libertarian think tank, in Washington Thursday.
Daniels met with House Transportation and Infrastructure Committee Chairman John Mica, R-Fla., and other members of Congress Thursday to argue against those features and in favor of using private capital to maintain public infrastructure.
At issue are amendments authored by Sen. Jeff Bingaman, D-N.M. One amendment would reduce federal highway funding for states that sell or lease toll roads to private companies by removing those highways from federal funding formulas.
The second Bingaman amendment would change depreciation and amortization requirements in the tax code to make leasing toll roads, such as the privately managed, publicly owned Indiana Turnpike, less attractive to investors.
The Bingaman amendments were first introduced in the Senate in 2009 as the Transportation Access for All Americans Act and the Transportation Equity for All Americans Act. Those bills were reintroduced in the current session of Congress.
The amendments are a shot straight at Indiana, a target identified by Bingaman in an opinion piece in The Washington Post, and other states that have used public-private partnerships to raise funds and build or maintain infrastructure.
Daniels, a hero to those backing public-private partnerships for his accomplishments in Indiana, is firing back in print and in person at what he called “retrograde proposals that fence off, and limit and discourage private capital.”
Bingaman’s amendments would “penalize states like ours that have had the effrontery to harvest dollars from an underperforming asset even though they were all reinvested in infrastructure, which is something we all agree is a good idea.”
A Spanish-Australian consortium paid Indiana $3.8 billion up front in 2006 to lease and manage the 157-mile toll road for 75 years. “It’s hard to say how great that deal was, there will never be another like it,” Daniels said at the roundtable.
The money was used to fund Major Moves, a 10-year transportation spending plan launched in 2005 that calls for building 104 new roadways and 1,600 lane miles in Indiana by 2015. The state completed 50 roadway projects by the end of 2011.
“We’re in a record building boom,” Daniels said, spending construction dollars at two to three times the run rate prior to Major Moves. Indiana is pursuing two other major public-private ventures, including an Ohio River bridge.
Public-private partnerships, championed by the Bush administration, lost luster in recent years thanks to public opposition, disappointment with some agreements and resistance from truckers, including the American Trucking Associations.
Daniels and his allies want to keep such projects on the table. “Some mix of private capital properly recruited and regulated is part of the answer” to the infrastructure crisis, he said. “We’re not going to get there the old-fashioned way alone.”
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter @wbcassidy_joc.