Protect MD taxpayers by putting the brakes on a rushed Beltway/I-270 P3 deal
Governor Hogan and MDOT Secretary Rahn are bulldozing ahead with their proposal for massive toll lane expansion on the Capital Beltway and I-270 – four new lanes on each highway at an estimated cost of $9 billion to $11 billion dollars. There are so many things wrong with this deal we won’t be able to tell you all of them.
A crucial vote will take place Wednesday, June 5, 2019, at the Maryland Board of Public Works: whether to authorize this for a Public-Private Partnership (P3) deal. This powerful body can say yes, no, or pull it off the agenda to allow for further review. Only the Governor, State Treasurer Nancy Kopp, and State Comptroller Peter Franchot sit on the Board, and Peter Franchot is the swing vote.
As Comptroller, Franchot has a responsibility to Maryland taxpayers and Franchot should vote to delay the vote pending more in-depth and independent review. The Pre-Solicitation Report includes clauses that put taxpayers at risk:
- If the toll road developer defaults on its commitments, and Maryland wishes to terminate – the state will still have to pay partial compensation to the developer’s lenders.
- If a court issues a ruling that blocks the project (such as for environmental impacts) the toll road developer must be compensated.
- Lawyers working for the state have hatched a complex scheme called the “MDTA notes” to get around legal obstacles that could impede the financing of the toll lanes. Not enough has been disclosed about this scheme for outsiders to judge whether it will work, whether it will put state taxpayers at risk, or whether it is even legal.
This proposed deal bears all the hallmarks of Virginia’s early disastrous P-3 deals, which included paying $300 million for a highway never built, and a tunnel deal with exorbitant tolls that required state payments to reduce the tolls. The main argument for doing a P3 per P3 supporters is to shift the risk to the private sector. That’s not happening here. See this critical report on the Virginia issues.
Meanwhile, Franchot shouldn’t take the Washington Post’s portrayal of its poll as indicating widespread support for the toll lanes. While 61% support the toll road at first, when people are next asked about their concerns, those concerns are overwhelming and very real:
- 73% of people are very or somewhat concerned about the loss of homes
- 69% of people very or somewhat concerned that the road will be too expensive to use
- 68% of people very or somewhat concerned that the road will not reduce congestion
The Post never asked the important follow-up question – something like: “Upon reflection, if these issues are indeed the case, do you support or oppose the toll lanes?”
Secretary Rahn’s is playing on the real frustration with congestion. But new and expanded highways in metropolitan areas fill up in as little as five years. The general-purpose lanes will fill up again. In fact, the toll road operator depends on general-purpose lanes staying congested, and increasing capacity on the Beltway and I-270 will also lead to more congestion on connecting roads.
It’s never a good idea to start with your conclusion and then bias the whole process. But that’s what’s happening here and happened with Virginia’s early P3 deals. The Governor and Secretary have:
- Refused to study a smart growth alternative
- Rejected all transit alternatives
- Refused to complete the environmental and community impact analysis before they plan to solicit bids from toll road companies
- Failed to be transparent to our legislators and the public, blocking legislation that would protect the public and the environment
The most effective long-term response to traffic is smart growth – creating more walkable, transit-oriented communities (building out our Metro stations in Prince George’s and Montgomery), combined with more transit (Purple Line, MARC, Metro, Bus Rapid Transit), and demand management incentives like expanded transit benefits. This is the only way to handle our population growth without more traffic. The Council of Government’s Long-Range Transportation Plan study (see Phase II Executive Summary Table E3) showed that Balanced Land Use, Demand Management, Bus Rapid Transit networks, and Metro all performed better than toll lanes as regional solutions.
It’s time to stop the headlong rush into a bad decision and a bad deal.