by Mark Gardner
The Free Press
illustration by Jenny Schmid
Why pay taxes? If the private market can take over for government, we can get rid of those pesky bureaucrats, cut the size of government, and tailor public goods to consumer demand. This is the premise of the privatization movement, an idea pitched with ideological fervor in the early Reagan years, but which is now quietly working its way through all levels of government.Washington state has positioned itself to be one of the leaders of this movement to off-load public responsibilities to the "free market." The 1993 legislature created a "New Partners"program with the aim of encouraging "private entities to undertake all or a portion of the study, planning, design, development, financing, acquisition, installation, construction or improvement, operation, and maintenance of transportation systems and facility projects."
This program draws inspiration from that paragon of public-spiritedness, California's Orange County, where private companies are building toll roads in an effort to feed that area's insatiable appetite for asphalt. It is being billed as a free lunch, with private capital replacing taxes that can remain in the hands of increasingly tightfisted taxpayers.
Hold on to your wallet. Rather than save money, this program is likely to evolve into a grand expansion of public subsidies for private profits. The proliferation of for-profit transportation monopolies will also result in travelers and commuters being dollared to death all over the state. And, it will erode public support for needed systems of mass transit.
According to a January 4 ad in the Wall Street Journal soliciting participants for the program, these projects "will be financed in whole or in part by user fees." The ad announcing this transportation bazaar mentioned projects ranging from rest areas to airports.
Companies themselves, not the state, appear to be dictating the proposals to an appointed board and the selection process is not even in place yet. Thus, it comes as little surprise that many of the proposals involve the reintroduction of toll roads and bridges.
One company plans to add a second bridge for carpool lanes next to the current 520 bridge, as well as a system of expensive sunken ramps covered by parks. An environmental gloss is added by the inclusion of a needed bikeway across the bridge. A number of similarly expensive projects have been proposed, ranging from a second Tacoma Narrows bridge, to the widening of 522 between Woodinville and Monroe, turning it into a toll road.
These projects, far from being free, will end up costing commuters quite a chunk of cash. For example, in the case of the 520 bridge, a dollar toll has been proposed. A twice-a-day commuter who works fifty weeks a year would pay $500 annually to traverse a previously free bridge. By comparison, the first leg of a Puget Sound regional mass transit system consisting of a 25 percent increase in bus service, Tacoma to Everett commuter trains, and the first line of a rail system is estimated to cost about $75 dollars a year per household. It doesn't take a financial whiz to see that "user fees" can be a very expensive form of tax. Rather than eliminating this necessary evil, this program will shift the tax burden toward those people who need to use the now-monopolized services.
"New Partners" is the highway lobby's dream program for shifting investment away from mass transit. For example, if just two projects proposed for the Seattle area are realized - the second 520 bridge and the grandiose idea of demolishing the Alaskan Way Viaduct and replacing it with a tunnel also serving Mercer Street - close to $2 billion would be diverted from other uses. People who are being taxed at least $2.00 a day to complete their commute would be less willing to pay for their share of a rail system for King County. And, by changing the criteria for investment from public need to "cost recovery" through user fees, the focus shifts toward auto-centered projects which promise a slight relief to stressed motorists, but keeps the sources of congestion intact.
And tolls won't be the only fleecing taxpayers will get. Since no one will pay to use something which hasn't been built yet, the money will have to come from somewhere. In theory, this will mostly be private cash. But the law also allows for "leveraging available federal funds as a means for attracting private sector capital," and for establishing a "revolving loan fund" to finance initial investments. The legislature has set aside a $25 million pool for this purpose.
Jerry A. Ellis, who oversees the program at the Department of Transportation (DOT), acknowledges that many possible projects, "do not pencil out with just private dollars." The state's low population density, strong environmental protection laws, and the Growth Management Act all make it less likely that some projects will have a quick payback. How then to get companies involved? You subsidize them.
That's why wording of the "New Partners" legislation emphasizes "doing such things as necessary and desirable to maximize the funding and financing." In other words, the state wants to turn over future transportation developments to for-profit companies, subsidize them with funds from Uncle Sam and the state, and then allow these companies to gouge you every time you use the facilities.
Even if the program brings in significant private cash, there's still no guarantee it will save taxpayers money. Privatizing public services just increases the number of players jockeying for funds at the public trough. This program has already resurrected projects long thought dead because of expense and political opposition, such as a second Tacoma Narrows bridge.
Ellis of DOT notes that firms from all over the world have expressed interest, including all of the major construction funds and investment houses. H. Ross Perot's son is even involved in one project. These are precisely the people who know how to play hardball in squeezing sweetheart deals out of the state. It takes only one example - defense spending - to demonstrate that widespread private involvement doesn't necessarily provide much bang for the buck.
The program also allows an end-run around local control and citizen involvement in planning. Social scientist and Eastlake Community Council activist Christopher Leman believes that "New Partners" is already eroding the gains resulting from thirty years of struggle to open up transportation planning. Since much of the information about the projects is considered proprietary business information, it is not covered by public disclosure laws. Citizens are again placed at the mercy of transportation bureaucrats and the board that decides which projects will be built.
This plan is thus a harbinger of the new post-Initiative 601world, a world where government divests itself of public responsibilities, cedes planning to the private sector, and favors business efficiency over democracy.
Companies working to have their projects approved have employed PR firms to massage public opinion. In the 520 case, a survey of residents in neighborhoods around LakeWashington neglected to mention that the project requires the construction of a second bridge.
Despite these misleading tactics, areas affected by the 520 proposal are going on record against the "New Partners" plan. For example, the Eastlake Community Council has taken a stance against the project, and a poll of the Portage Bay-Roanoke Park Community Council showed that a majority of members are against it. And, the Peninsula Neighborhood Association, among others, are gearing up to oppose a second Tacoma Narrows bridge.
Stay tuned for long protracted struggles of the sort waged against freeway expansion in the seventies.
Filling a shortage in transportation dollars is the main public rationale for this program. The Tacoma News-Tribune quoted Rep. Ruth Fisher, chair of the House Transportation Committee and sponsor of the bill, as saying that "The whole philosophy is that we can't raise enough taxes to meet these needs."
Where is the evidence for this claim that a small increase in the gas tax would be politically unacceptable? If 50 percent of an increase went to improving roads, and the other half to mass transit, we would have our real needs covered. This would require at the same time making a long-overdue change in Washington's Constitution, which presently precludes using the gas tax to fund mass transit. The gas tax has the advantage of already being a user fee of sorts, since the more you use highways, the more you pay. If need be, put it up for a vote. If the voters reject it, then let's slow down construction until a better case can be made for it, or until deterioration makes voters realize that they get what they pay for.
There's nothing wrong with involving private companies in transportation; after all, most construction is done by them already. And, some of the "New Partners" projects seem relatively innocuous, such as the construction of park-and-ride garages. But ceding large-scale transportation planning to companies with a vested interest in more roads, and granting private monopolies control over essential services is not the way to go. Achieving a sensible public-private mix won't please "free market" puritans, who lose sleep worrying that something, somewhere might be happening that doesn't make someone a profit. But the rest of us will all be better off.
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Contents on this page were published in the June/July, 1994 edition of the Washington Free Press.
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Copyright © 1994 WFP Collective, Inc.