Ray LaHood, the U.S. transportation secretary, announced the approval Monday of a $386 million federal loan to aid in financing the 18.8-mile Triangle Expressway, according to today’s N&O. The Triangle Expressway is a proposed toll road (the first in NC) connecting Research Triangle Park and western Wake County. The rest of the financing for the project, $615 million, will be loaned in bonds.
The grand total; $1 billion in borrowed money used on the construction, operation and maintenance of the new toll road to be paid off over the next 30 to 40 years by high tolls.
Even though efficient transportation is critical for NC industry, why borrow $1billion on road construction and make a bid for inclusion in the $8 billion federal stimulus package for a high speed rail system?
Shouldn’t we have limited our debt to one massive-spending project at a time?
Would you carpool to work if you were paid $2 per day to do it?
Seems like those in the DC Metro area are willing to try just about anything to reduce traffic congestion.
Regional transportation officials say they'll start paying people to carpool.
Basically, they'll buy the coffee if you'll ride with someone else.
While this may sound a little off the wall, if local governments here in North Carolina were serious about reducing congestion, they would try incentives such as this before building expensive, ineffective light rail. The Blue Line in Charlotte costs about $6.30 per rider to operate. Charlotte would be better off not running the trains and handing a fiver to every person to carpool.
But as we know, rail transit isn't about reducing congestion, it's about central planning.
The NC Turnpike Authority is in the process of issuing bonds (debt) to build the state's first government-sponsored toll road in western Wake County.
Well, a bond rating agency apparently doesn't think too highly of the project. Fitch's has given the bonds a rating of "BBB-" one step above junk bond status. This is after the state has agreed to commit $25 million per year in funding for the project, supposedly to make up for the "gap" in lacking revenues to cover expenses.
Staying out of the junk bond status is vitally important for the turnpike authority because many financial institutions can't and won't invest in junk bonds.
A quick look at some bond rates show that BBB- bonds pay about 2 percent higher interest rate than AA or AAA bonds. So this rating is going to cost even more money through higher interest costs over the life of the toll project.
But the take away here is we have a toll road project that private investment firms think more than likely isn't financially viable. If these bonds weren't backed by a government agency, there's probably no way they'd get financed. But since government is pledging its backing, it gets built.
We need more projects like the Mid-Currituck Toll Bridge that are funding through public-private partnerships where a private company bears the risks and rewards of building toll roads, not the taxpayers. That way, only projects that are viable will get built, and we avoid building expensive new roads on which few people will travel (Fayetteville loop, anyone?)
So don't be surprised a couple of years from now when the Turnpike Authority comes back to the General Assembly saying that ridership projections aren't keeping up with needed revenues and they want more tax dollars to plug the gap.
President Obama's Secretary of Transportation, former Republican Congressman Ray LaHood, finally admitted publicly what the President's transportation policy is about.
In response to George Will's recent column (a great read on its own) calling LaHood "Secretary of Behavior Modification" LaHood responded:
"About everything we do around here is government intrusion into people's lives," he said.
Well there you go. President Obama and Secretary LaHood (and quite a few in the North Carolina General Assembly) think they know best how you should get to work, to the store, or transport your children.
My question is, if cars are so evil, why are we spending billions of dollars saving the car industry?
Advocates in Charlotte and the Triangle for expensive light-rail transit projects like to argue that one reason to build transit is that it helps low-income individuals. Unfortunately, data released by the DC Metro system shows its more of a subsidy for the upper-middle classes (as we have pointed out many times before.)
According to the Washington Examiner, the median income of DC Metrorail riders is $102,110. And at least 80 percent have a college degree.
Conversely, Metrobus riders are less affluent (median income $69,000) and are less likely to own a car.
So if these transit planners in Raleigh were serious about helping low-income individuals and families with transportation needs, they'd be expanding bus service, building Bus Rapid Transit and HOT lanes, not building light-rail for the rich and paying for it on the backs of the poor through a 1/2 cent sales tax increase.
In an apparent attempt to snatch the #1 ranking for highest taxed county away from those pesky folks in Dare County (Mecklenburg is currently 2nd), the Charlotte City Council and the Mecklenburg County Commissioners are debating whether to ask the General Assembly to include them on a bill that has already passed the NC House that allows urban counties to raise their sales tax by 1/2 cent to pay for transit.
But wait, I'm sure you're asking, doesn't Mecklenburg County already have an additional 1/2 cent sales tax on the books since 1998 that they are using to build transit? Yes, they do. But apparently it's not enough for their grand plans.
Transit officials are now saying that the existing revenue stream is not enough to build the next phases of the transit rollout and that more money is needed.
While this is surely a blow for Charlotte's train dreams, what does this say about the Triangle's plan for transit?
The Triangle Transit Authority (TTA) was banking on raising enough money from a 1/2 cent sales tax increase in Wake, Durham and Orange counties (and a $10 increase in vehicle registration fees) to fully build out the transit system locally.
If a 1/2 cent sales tax only provided enough funds for one single $500 million line to be built in Charlotte, how is the same amount going to provide enough revenue for Triangle Transit to build its $8.2 billion transit pipe dream?
The folks at TTA may be well intentioned with there designs for rail transit in the Triangle, but they only need to look to Charlotte to see that their cost and expense models are way off base.
After seeing many other states and nations successfully construct new toll roads and bridges through public-private partnerships (PPPs), North Carolina has finally decided to take that step and hop on the bandwagon. The N&O reports that NC has signed a preliminary agreement to have a private company build a new toll bridge to the outer banks.
A wise choice. Civitas has often advocated NC explore this possibility.
But one thing in the article really jumped out at me. This quote from NC Turnpike Authority executive director David Joyner:
If the private sector knows how to do these things quicker, cheaper and more efficiently, why are we not building ALL toll roads this way?
PPP's should be further explored as a way for NC to build new infrastructure capacity. It allows each project to be deemed worthy on a cost-benefit basis, it gets new roads built, and it relieves the taxpayers from constantly being on the hook for funding new projects (taxpayers are committing $25 million per year to the yet to be built Triangle Expressway).
HOV or HOT lanes could be added to I-95, I-40, I-85 or I-77 this way (as Virginia is doing with the I-495 Capitol Beltway). New bypasses and toll roads could all be built, run and maintained by private companies, freeing the state to use existing resources on maintaining our crumbling infrastructure.
All in all, a step in the right direction for the often maligned NC DOT.
The outright distortions of fact and truth from those on the left wishing to raise taxes to build inefficient and costly light rail in the Triangle seem to have no end.
Karen Rindge, who heads up a so-called progressive organization WakeUp Wake County, says that raising the sales tax on all residents in Wake, Durham and Orange counties in support of building the $2.2 billion rail system is fair because "everyone is going to use the system."
Huh? Everyone?
Even the most optimistic projections from the Triangle Transit Authority (TTA) say that the trains will only carry 30,000 daily riders by the year 2030 (when the population of the Triangle is projected to be around 2,000,000). So how in the world is that "everyone"?
At most, trains will initially take 3% of the cars off the roads, which will quickly be made up by an increasing population, negating the benefits in just a couple of years.
So how does "everyone" use it?
This distortion of reality is nothing new for groups like WakeUp Wake who want to tax everyone and control where people can live and prosper. The group is nothing more than a bunch of central planners who think that they know best how to run other people's lives.
Let's reject this coming boondoggle of light rail in the Triangle. If these people were serious about public transportation, they'd be encouraging increased bus usage, which is both less expensive and able to be flexible to changing population patterns.
They want trains because they want to control where people live, where they work and how they travel. No tax is too great, no price is too high.
Yesterday, Raleigh Mayor Charles Meeker announced that the city was going to install eight stations in and around downtown where people can plug-in and recharge their hybrid-electric cars. Really forward thinking of him, right?
A couple of problems:
1. No one is driving these cars yet. Plug-in hybrids aren't set to be put into production until late 2010 or many are thinking realistically 2011 given the problems with the auto manufacturers.
2. Plug in-hybrids aren't affordable. Conservative estimates put the price tag of one of these cars at $35,000 or more.
So what we have here is Meeker continuing his pattern of subsidies for rich, downtown elites (who else can afford a $35,000 car that only goes 20-30 miles before needed a charge)? Spend $1 million on a white-table cloth restaurant downtown and its $12 lettuce wedge, excellent! $3 billion for a light rail system for the 3 percent of rich, white folks who are too good to ride the bus, sure! What's another few thousands to build stations for cars that nobody is driving yet and few will be able to afford?
A larger problem is Meeker's insistence that government take the lead in installing the stations, crowding out the private market before the private market even exists. Why not wait and let private industry come and pay the City for the privilege to install the stations? Or let a private business (hello Progress Energy?) seek out service agreements with private enterprise on the placement of stations?
Meeker's not putting the cart before the horse with this plan, he's building a cart before the horse even exists.
Conservative public policy institute in Raleigh.
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