Calcasieu P3 toll bridge idea needs canceling

Blog: Between The Lines

Abstract

A threatened de facto tax increase mainly on
denizens in the Lake Charles area now seems set to wither away by the time
incoming governor Republican Atty. Gen. Jeff Landry takes command.

That
was the proposal by the outgoing Democrat Gov. John Bel Edwards to
have tolls finance
$1.3 billion of a projected $2.1 billion to construct a new Interstate 10
bridge across the Calcasieu River in Lake Charles, as well as perform some
widening around its bases. The remainder of the money the state planned to
leverage with a mix of state and federal dollars, primarily complemented by a
$40 million a year revenue stream from the switchover of vehicle taxes from the
general fund to transportation.

The plan announced this summer raised hackles
immediately. The economics
behind it weren't all that bad, in that users rather than general taxpayers
statewide would foot the bill, and likely it could have been completed at lower
cost through a public-private partnership relying on tolls to keep the state's maintenance
costs close to zero for a half-century.

But the problem was local drivers just trying to
get around would end up paying per trip tolls of at least two dollars, perhaps summing
to substantial annual amounts depending upon how peripatetic their journeying,
or otherwise facing substantial lengthy and time-consuming detours as they
maneuvered around Lake Charles and in particular to and from Westlake. The idea
would have had negative economic consequences either by siphoning money out of
the users or in lowering productivity with all the wasted gas and travel time.

Accordingly, not long after statewide elections confirmed
Landry's path to the governor's mansion, the Legislature's transportation
committees met jointly to vet a deal that the state had struck with a
consortium of builders to engage in a public-private partnership to build the
new bridge over seven years. After debate, the House
Transportation Committee's Republican majority quashed the idea minus GOP
state Rep. Barbara
Freiberg who joined with its Democrats present unanimously in support after
a move to delay consideration by Freiberg failed.

Afterwards, the Edwards Administration announced it
would pursue rehabilitation the existing structure, deemed structurally deficient
by federal authorities, that would extend the bridge's lifespan perhaps three
decades or around a third of the expected life of a new bridge. In fact, the
cost for doing so would not match the $800 million in scratch money, but it
argued eventually a replacement would have to be built, even if in stages over
the years, that would require additional monies.

Not that the state doesn't have plenty. Just
this past legislative session alone nearly $2 billion was pumped into a
variety of capital projects, some worthy, others less so, or put away into
funds constitutionally or statutorily required. One such recipient, the Revenue
Stabilization Trust Fund, which could be used to pay for a new bridge immediately
by legislative supermajorities, has
$3 billion in it.

But that would leave fewer bucks to spread around
than by indirectly taxing people around Lake Charles and long-haul
out-of-staters and make government smaller, so the Edwards Administration made
a never-say-die announcement that it would continue to
solicit bids for a P3 toll bridge until Feb. 1, over three weeks after
Landry assume office. Given the rebuffing of the former awardee, it's highly
unlikely anybody would make an offer, and once Landry takes over, expect the
opportunity to go away.

The dual track rehabilitation and new bridge
strategy produces the best return on investment without unduly burdening a
subset of Louisianans. The RSTF when above $5 billion can have up to a tenth of
it included in annual capital outlay, which could provide a steady stream of financing
in a few years for the new structure, and don't forget that now with
Louisianans occupying the top two positions in the U.S. House of
Representatives and a reasonable expectation that will continue for the next
few years that special attention will go to ensuring federal funds are there to
help.

That strategy adheres best to the sea change
approaching in Louisiana government that shies away from growing government and
places greater emphasis on letting people keep more of what they earn.