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For whom the tollway tolls

ALEC-driven privatization hits town



Here is how the toll lanes on U.S. I-77 north of Charlotte will work for commuters after they're finished, ostensibly in 2018. Let's say you live in Cornelius, you've left home a couple of minutes late and you have an early appointment at your office job in Charlotte. A mile into your trip, traffic is already stalling to a crawl. After a couple of minutes of tiresome creeping, you start slo-o-o-wly moving over to the toll lane.

Uh-oh. There's already a crowd backed up on route to the lane. You hope the toll itself hasn't risen too much in the meantime, since the "deal" worked out by the state with the toll lane's private builder allows the company to charge a higher toll as the lane becomes more congested. The last time you took the toll lane, it cost $7.50 one way, and you've heard of some folks having to pay as much as $15 in peak hours. For that kind of price, you'd expect the private company running the tolls to guarantee something better than "at least 45 miles per hour," but at this point you're stuck with whatever they'll give you.

By the time your turn arrives, the price has climbed to $8. You sigh, wait for the signal that the system's transponder has successfully read your license plate, and you take off, hoping traffic will move quickly enough to let you make your early appointment. After all, you just forked over eight bucks for the "privilege" of driving a whopping 45 mph.

Including I-77's Mooresville-to-Brookshire-Freeway toll lanes, the Charlotte area is slated to see at least four toll roads plopped down amid some of our most congested, albeit toll-free, highways in the next few years, thanks to former House Speaker, now U.S. Sen. Thom Tillis and his cronies in an advocacy group run by the Koch brothers. Residents of north Mecklenburg have organized against that area's toll lane project and are going to court to block it. Whether they succeed or not, there's a very real possibility N.C. taxpayers will be stuck giving huge sums of corporate welfare to the chosen tollway building company, whose own reckless financial record does little to inspire confidence in its ability to create, maintain and run a successful tollway here.

DURING MORNING AND afternoon rush hours, I-77 between Charlotte and the Lake Norman area is an infamous "parking lot," where traffic moves at a snail's pace and commuter nerves are shredded. It's been that way for well over a decade. That part of the highway, built in the 1970s, has never been widened, even though our region is now home to 10 times more people than were here during that era. Efforts to have the stretch widened have been frustrated by the complex politics of road-building in North Carolina, which too often gave piles of highway money to sparsely populated rural areas while starving urban communities — you know, where traffic congestion actually happens. And so north Mecklenburg commuters' suffering continued unabated.

Then in 2010, Thom Tillis, of north Mecklenburg County, was elected Speaker of the N.C. House of Representatives, at which point he turned to ALEC for lawmaking ideas. ALEC, the American Legislative Exchange Council, is a corporate-funded "research" group run by the billionaire Koch brothers' organization that has had an enormous influence in the past five years on the legislative agendas of a number of state legislatures, including North Carolina's General Assembly.

ALEC, which has close ties to N.C. GOP sugar-daddy Art Pope, creates hundreds of "model legislation" bills and sends them to its members in the various state legislatures. The group pushes bills that block environmental protections; cut public education spending; promote charter schools via "vouchers"; install voter ID and anti-immigration laws; and increasingly privatize highway systems. If those issues sound familiar, it's because several states, including North Carolina, addressed them via bills that were blatantly based on ALEC's "models."

Take the "ALEC Statement of Principles On Road Transportation Financing." It calls for "market-driven highway system(s)" which operate "on a user-pays basis." No. 1 on ALEC's list of highway ideas? Toll lanes, operated by private companies.

Tillis did such a great job getting parts of ALEC's agenda through the General Assembly, the group gave him its "Legislator of the Year" award in 2011. Part of Tillis' legacy is the fact that late last year, the N.C. Department of Transportation committed the state to yet three more toll lanes in the Charlotte area in the next 10 years: I-77 from Uptown to the South Carolina border, U.S. Highway 74 from Uptown to Matthews, and on I-485 from Rea Road to U.S. 74 (the latter is the source of the commuter-maddening "unused I-485 lane," reserved for a toll lane about five years from now).

North Carolina contracted with massive Spanish construction company Cintra Infraestructuras to build and operate the I-77 toll lanes for 50 years, with toll rates to be determined by the company. Buses, motorcycles and cars with at least three occupants would be allowed to travel free in the lanes.

Cintra's recent record in the U.S., however, is not impressive. In 2006, Cintra and another company, Australian-based Macquarie, signed a 75-year lease on the already functioning Indiana Toll Road for an eye-popping $3.8 billion. They immediately doubled the toll, and according to critics, didn't keep the road in good repair. Drivers consequently found other ways to get where they were going, and in September 2014, the toll road went into Chapter 11 bankruptcy.

In 2012, Cintra opened its latest tollway, Texas state highway 130. Last year, Cintra's debt in the project was downgraded to junk bond status, and the company went into technical default. Luckily for Cintra, in stepped the federal government with a $430 million loan. Trouble is, once the tollway goes broke (only half the projected traffic has shown up), guess who's on the hook for that loan? Citizens like you and me.

Cintra also has two other major roads projects in Texas that are on equally shaky financial ground; those projects are eating up $2 billion in more government loans. Another tollway project in Virginia, for which Cintra received $250 million from the state, was scuttled after Cintra and its partners didn't secure needed environmental permits.

SOME NORTH MECKLENBURG residents want to know why the state didn't just build extra lanes to widen I-77, rather than hand over the county's most problematic commuter traffic to a foreign company for 50 years. Led by businessman Kurt Naas, those residents founded the group Widen I-77, and are suing North Carolina over its toll lane plans.

Naas says the state's arguments that toll lanes can be built more quickly and at less cost by a private firm are invalid, and that widening I-77 with public funds can be done for less money in about the same amount of time.

Naas believes that instead of adding lanes closer into downtown Charlotte, the state should add general-purpose lanes on the northern edge of the city, where traffic is more congested. "That would cost about $100 million," Naas told the conservative Carolina Journal. "It would end up costing the taxpayer less to build a general-purpose lane than it would the toll lane."

Naas also notes that the Cintra-DOT contract could force the state to pay $12 million more a year if the company can't collect enough toll revenues to meet its bond payment obligations. That money would be capped at $75 million.

Another aspect of the state's highway problems is revealed in Naas' eye-opening Wants vs. Needs analysis, posted on the Widen I-77 website; namely, the extraordinary amount of N.C. roads money going to small communities — towns that don't deal with the kind of traffic that burdens an economic engine like Charlotte. For example, Naas notes, the state is budgeting an incredible $202 million for a bypass around Mocksville. Naas comments, "Mocksville has a population of 5,000, and already has a bypass. It's called Interstate 40."

Another group, North Carolina Citizens Against Toll Roads (NCCATR), suggests that the General Assembly stop using ALEC for transportation infrastructure ideas and rely instead on the state's Transportation division to relieve congestion. At the very least, they say, the state should have a statewide toll roads referendum to let N.C. citizens decide if they want toll roads or not.

What's interesting is that the usual left/right divide doesn't appear to come into play in the toll lanes dispute. Strong supporters of the tollway project are hard to find outside of government circles; even conservative think tanks, which normally support a GOP agenda, have either opposed the project outright (as does the Civitas Institute), or given it a mixed reception, as has the John Locke Foundation. JLF's Michael Lowrey, for instance, says he's not opposed to all toll roads, but he feels the state needs to be careful setting criteria for when tolls would be an appropriate traffic strategy. "Using a toll option always costs more," Lowrey says. "Sometimes that extra cost is worth it, sometimes it isn't ... You can think of toll roads like a credit card. It's always tempting to say 'Charge it!,' to splurge now, to build a new road or widen an existing highway now. Unfortunately, sometimes we end up regretting that decision later."

Government officials, however, are fully on board the toll roads bandwagon, saying North Carolina will get a good deal out of the toll lanes, although the state could wind up covering Cintra's losses while the system is getting cranked up. Jen Thompson, a Department of Transportation spokeswoman, emphasized to Raleigh's News & Observer that the toll lanes will offer choices to motorists. "They'll be able to continue using general-purpose lanes for free, or HOT lanes for free if three or more passengers are in the car ... It will be up to you to decide how much your time is worth," said Thompson.

Chris Fitzsimon of progressive think tank NC Policy Watch, however, says privatization of our roads is possibly the worst strategy the state could pursue. "Privatization of traditionally public services very rarely, if ever, actually saves money or improves efficiency, despite what politicians say," says Fitzsimon. "In this case, you have the additional problem of giving a 50-year lease to a Spanish company [Cintra] that has serious financial troubles. In addition, there's the issue of giving drivers who can afford the expensive tolls a break, while someone who can't pay outlandish prices for a 20-mile commute is stuck in traffic. Government shouldn't be part of setting up a new system that gives preference to those with more money. These are supposed to be public roads with equal access to all, not a two-tier system where ordinary citizens get a raw deal."

Correction: The print edition of this story misspelled Michael Lowrey.

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