Highway Robbery

Fixing potholes is often cited as the quintessential job of
government. But many US politicians are looking to private
investors to do their jobs for them, and the American people are
picking up the tab. The Federal Highway Administration estimates
that current highway funding will need an infusion of $800 billion
over the next 16 years, just to rehab existing bridges and roads.
Privatization is being billed as a win-win solution, one in which
the roads get fixed and citizens don’t have to pay higher taxes.
But Daniel Schulman and James Ridgeway, writing for
Mother Jones, warn that such deals may
be ‘a major turn toward handing the nation’s common property
over to private firms, and at fire-sale prices to boot.’

Lawmakers tend to see privatization as a way to fix highways
without taking the politically unpopular step of raising taxes.
‘Privatization promises a quick fix,’ say Schulman and Ridgeway,
‘and a way to outsource difficult decisions, like raising tolls, to
entities that don’t have to worry about getting reelected.’

The problem is that voters and taxpayers get left out of the
equation — and ultimately end up paying the price. Eileen Welsome
of the TexasObserver reports that that privatization may lead to
‘double taxation,’ whereby motorists are charged both through
expensive highway tolls and traditional taxes. To make things
worse, writes Welsome, ‘the large, multinational companies and
global investment firms are often using taxpayer-supported bonds,
loans, and grants from sources such as Texas’ State Infrastructure
Bank, the Federal Highway Administration, and the Federal
Department of Transportation.’

What’s more, the profits turned from that private capital isn’t
going back into communities or even staying in the country. Foreign
companies such as Cintra and the Macquarie Infrastructure Group
have been major investors in highway privatization projects,
meaning that the profits from those projects will be exported to
Spain and Australia, respectively. It’s a scenario that
particularly rankles conservatives, already piqued by double
taxation. Mother Jones quotes conservative activist
Phyllis Schlafly asking, ‘Why the rush to sell our transportation
systems to foreigners?’ But even the lefty consumer rights pioneer
Ralph Nader has compared the situation to the Louisiana Purchase,
where a huge revenue source is given away for ‘a miniscule up-front
payment.’

In spite of such attacks, privatization efforts are moving ahead
at full speed. Cintra and the Macquarie Infrastructure Group
recently purchased a 157-mile Indiana toll road for $3.8 billion,
and other private infrastructure deals are being planned from
Alabama to Alaska. ‘Don’t be fooled,’ Dollie Cole tells the
Texas Observer. ‘You are paying for a road twice and will
continue to pay throughout your life and throughout your children’s
driving life.’

Go there >>
The Highwaymen from Mother
Jones

Go there, too >>
The Highwaymen from Texas Observer

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