The Middletown Press (Middletown, CT)
State lawmaker: Private-sector money key to tolls, improving roads
Sen. Alex Bergstein, a freshman Democrat from Greenwich who favors tolls on all vehicles, also wants to employ a financing approach that could leverage huge private investment and dramatically accelerate the rebuild of Connecticut’s aging, overcrowded transportation system.
“I’d be happy to resolve the tolling issue this year, not just to extend the conversation,” Bergstein told the CT Mirror. “We don’t have the luxury of waiting any longer. To drive economic growth in this state, we need to make it business friendly, and this is what the business community tells us it needs.”
Deficient and “severely congested roads” cost Connecticut drivers $5.1 billion annually, the state’s Transportation Finance Panel reported in March 2016. This includes $1.6 billion in additional vehicle operating costs, and $3.5 billion in lost productivity tied to congestion-related delays.
An analysis issued late last year by the state Department of Transportation estimated electronic tolling on all major highways could raise as much as $950 million annually by 2023 and cost about $370 million to install. But officials also have said the annual revenue could vary somewhat depending upon the level of discounts legislators want to offer to Connecticut residents and businesses.
DOT officials also have said, depending on how tolls are structured, out-ofstate motorists would provide slightly more than 40 percent of the revenue.
But Bergstein, vice chairwoman of the Legislature’s Transportation Committee, said legislators should consider another costsharing option that also could speed up the longoverdue rebuild of the transportation system: Securitization.
Connecticut could wait the estimated four years it would take to install toll gantries and get the system fully up and running. Or, if tolls are approved this year, it could market that potential $950 million-per-year toll revenue stream now.
In the past, securitization often involved a state offering a future revenue stream — say, 10 years of receipts from a particular fee — in exchange for a one-time, up-front payment that’s less than the pledged revenue stream over time.
It’s like when a lottery winner forfeits a bigger prize paid over 10 years to get a smaller, lump-sum award right away.
But what if Connecticut offers that toll revenue stream to private investors who also want a modern transportation system?
Rather than getting 40 or 50 cents up front for every $1 of future toll revenue pledged, Bergstein said, Connecticut could leverage more money up front than it commits down the road.
How much? Possibly $7 to $9 of private-sector money for every $1 the state pledges, she said.
“It is about unlocking this enormous pot of private-sector money that we are not accessing now,” she said.
Toll securitization involving public-private partnerships began to crop up in the U.S. in the mid-2000s.
Chicago leased the Chicago Skyway toll bridge for 99 years to a private investment group for $1.83 billion in 2005, according to an analysis of toll securitization by GlobalCapital.com.
One year later, Indiana approved a 75-year lease of the Indiana Toll Road for $3.85 billion.
The trade-off for these deals, though, is that private investors want a return on their investment. If the numbers aren’t crunched properly, toll costs can escalate.