December 4, 2008 - 07:00

Lawmakers hear varying opinions of public-private partnerships

BOSTON - The state Legislature's Joint Committee on Transportation convened Wednesday for the first of four planned public hearings on tackling the state's transportation costs and offered few insights as to what proposal it would support.

How the state should pay off roughly $2 billion in Big Dig debt has become an increasingly political issue. The Massachusetts Turnpike Authority's board and Gov. Deval Patrick have proposed eliminating the Massachusetts Turnpike Authority and removing tolls west of Route 128 except for at the New York and Connecticut borders while increasing tolls at tunnels heading to Logan Airport. Many in the Legislature have voiced their opposition to that proposal. House Speaker Salvatore DiMasi has said increasing the state's gas tax would be a better solution.

Those political tensions surfaced early in the lengthy hearing, as House Chairman Joseph Wagner (D-Chicopee) said Patrick's plan was a "disjointed" attempt at tackling a complex issue.

"It was," Wagner said, "offered up in a context but without any detail relating to a larger reform that the administration would intend to forward to the legislature."

At issue in Wednesday's hearing was whether the commonwealth should seek a public-private partnership in which it leases either the Massachusetts Turnpike or some of its tunnels to a private company. Such an arrangement could provide the state with a lot of money quickly. On the other hand, such an agreement could allow a private company more control over raising tolls in the future.

"It is my belief," said Senate Chairman Steven Baddour (D-Methuen), "that there are no easy solution to the problems we face in our transportation system."

Seated in a warm room that was packed at the beginning, the committee heard testimony from several witnesses including Leonard Gilroy, the director of government reform at the Reason Foundation, a nonpartisan Los Angeles think tank that studies transportation policy. Gilroy outlined several benefits he has researched in public-private partnerships of roadways in Chicago and Indiana, including better maintenance and how the state's benefited from the billions of dollars they received for the lease. Chicago leased its Skyway for $1.83 billion for 99 years in 2004 and Indiana brought in $3.8 billion for its toll road when it leased it for 75 years in 2006.

Most strikingly, however, Gilroy noted that Massachusetts spends the largest percentage of its revenue from the Pike on operation and maintenance of 35 toll roads it has studied. On average, state's use about 40 percent of revenues on operation and maintenance, Gilroy said, Massachusetts spends 79 percent.

Another witness was John Schmidt, the attorney that represented Chicago when it leased its Skyway. Schmidt said that the SkyWay has improved since it was leased. "The quality of the operation of the Skyway has clearly improved," Schmidt said. "I think it's the universal view in Chicago that operation has improved."

Schmidt also said that the state could impose limits, as Chicago did, on toll increases and that utilizing technology, meaning using electronic devices to collect tolls instead of tollbooths, has made a significant different in the Skyway's efficiency. "That alone has improved the quality of service on the Skyway," Schmidt said.

Others witnesses, including those that represent some labor unions in Massachusetts, disagreed with the idea of entering a public-private partnership. Joe Dorant, the president of the Massachusetts Organization of State Engineers and Scientists, said that several states considered entering a public-private partnership but eventually decided against it because it was not the most beneficial for the state.

"Privatizing of toll roads is a growing trend around the nation," Dorant said, "Most determined that it is not in the public interest and that it was a bad deal for the taxpayers."

In New Jersey, Dorant said, Gov. Jon Corzine, a former executive at Goldman Sachs, decided against a public-private partnership, as have officials in Pennsylvania, Florida and Texas.

Ultimately, Dorant said, private companies "are out to make the best deal for their investors and I think we should be concerned about the best interest of the taxpayer."

Karen Christie, the president of the United Steelworkers of America Local 5696 and who has been employed by the Massachusetts Turnpike Authority, echoed that sentiment. Private companies, she said, are looking for the most profit above all else.

"I think we need to go back to everything that has been written and review them because there are some proposals that make perfect sense that do not include privatization," Christie said.

The lawmakers on the panel asked few questions and gave few hints as to where they stand on the issue. Baddour, like his House counterpart Wagner, told the Boston Globe on Tuesday that privatizing some of Massachusetts' roads must be considered.

But instead of directly discussing that position at the hearing on Wednesday, Baddour instead criticized Patrick's proposal, which calls for the elimination of the Massachusetts Turnpike Authority and allowing Massport to assume control of the tunnels in Boston and the Pike east of Route 128.

The governor's plan, Baddour said, is like "shifting the Big Dig problem to MassPort."

Jeremy P. Jacobs is a PolitickerMA.com Reporter and can be reached via email at noreply@politicker.com.

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