Public Split Over Possible Tolls for Louisville Bridges

Public Split Over Possible Tolls for Louisville Bridges
April 22, 2010

Few people showed up for the first three meetings of the agency overseeing the $4.1 billion Ohio River Bridges Project in Louisville, Kentucky, but that changed for the fourth meeting, in April, after opponents started a Facebook effort to inform people tolls on existing bridges could fund the bridge construction.
 
Seventeen people—mostly opponents to both the proposed project and tolls to pay for it—asked to speak at the April 8 meeting of the Louisville-Southern Bridges Authority. Eight were given about two minutes each. Only one of the speakers favored tolls.

Facebook Face-Off
The River Bridges Project calls for two new bridges connecting Louisville with Southern Indiana, plus reconstruction of what’s become known as “Spaghetti Junction,” a confusing conglomeration of lanes and roads for drivers where Interstates 64, 65, and 71 come together in downtown Louisville.

Opponents of the proposed project have created two Facebook pages with nearly 1,400 members to rally opposition toward imposing tolls on the currently free bridges.

Elected officials from both political parties have expressed support for tolls. Indiana Governor Mitch Daniels (R) appointed seven members of the bridge authority and says tolling is “absolutely necessary.”

Louisville Mayor Jerry Abramson, a popular Democrat who appointed four members, also supports tolls. The issue has gained steam in the campaign to replace Abramson, who will not run for reelection after being chosen as Kentucky Governor Steve Beshear’s running mate in the 2011 gubernatorial campaign.

Jim King, a leading Democratic Party mayoral candidate and current member of the Louisville Metro Council, has signed a petition opposing tolls on existing bridges. Republican mayoral candidate Chris Thieneman said on his Web site not all drivers crossing the existing bridges should be charged, but he “might make an exception for tolling high occupancy traffic lanes.”

While the bridge project is on its way—with much of the preliminary environmental approval process already completed—the authority has not determined its funding.

Needs ‘Innovative Funding’
Tamar Henkin, a Washington, DC-based consultant, told the authority that because transportation dollars are scarce, “states are turning to innovative funding such as tolls, or even farming out projects to private companies.”

The financing approach the authority is considering would include placing tolls on the bridges that currently carry I-64 (Sherman Minton Bridge) and I-65 (Kennedy Bridge) traffic across the Ohio River. Completed in 1963, the Kennedy Bridge is the newest of the spans.

Local financial planner Shawn Reilly told the Louisville Courier-Journal, “the citizens should have a right to use bridges we’ve already paid for” without being forced to pay “a new tax.”

Interest Rate Benefits
While opponents held up yellow signs and the April meeting—one said “TOLLS R 4 TROLLS!”—David Nicklies, chairman of the Bridges Coalition, a nonprofit group formed to speed the project along, said accepting tolls as a revenue stream to lock in current low interest rates could help save $1 billion.

The project also could mean “tens of thousands” of new construction jobs for Kentucky, where 16,100 manufacturing jobs were lost during the past year, he said.
 
InsideINdianaBusiness.com reported economic development officials claimed the “bridge project could create more than 50,000 jobs.”

Attacks on Financing
But no financing plan—including tolling—is a guarantee of success.
 
San Diego’s South Bay Expressway recently filed for Chapter 11 bankruptcy protection after being open less than three years.

The March 30 Washington Times cited the South Bay project in an editorial attacking public-private road projects, concluding, “bureaucrats and politicians turn to public-private partnerships because they, in effect, outsource unpleasant revenue-raising duties to private companies.”

But the bankruptcy of the South Bay Expressway does not deter public-private project supporter Sam Staley, director of Urban and Land Use Policy at the Reason Foundation, a California-based think tank.

No Taxpayer Risk
“Privately financed, operated, and maintained toll roads are still very viable and should be expanded as an option for meeting transportation needs,” Staley said. He argues the South Bay project’s bankruptcy came about because only 22,600 paying customers travel the road daily, instead of the 60,000 customers originally forecast by the Australian firm that owns the expressway.

He explains the disappointing number of daily travelers as a near “perfect storm” of setbacks, including the deep economic recession, the bursting of Southern California’s housing bubble, and road usage forecasts created “years in advance and projected over decades to make decisions.”

Staley predicted the project will get “back on track” as the economy improves. Besides, he said, the worst that could happen with the South Bay project is that it would revert to public ownership.

“Lost in the criticism of the South Bay Expressway is that taxpayers haven’t had to shell out one dime to pay for the road,” Staley said. “The risk was completely shifted to the private sector and financiers. That’s a good deal anyway you look at it.”

Jim Waters (jwaters@bipps.org) is director of policy and communications at the Bluegrass Institute for Public Policy Solutions in Bowling Green, Kentucky.