roads – Memphis Flyer

by Sam Stockard, Tennessee Lookout

Not long after the Tennessee Department of Transportation proposed public-private partnerships to build express lanes and cut congestion on highways, the University of Tennessee-Knoxville sought permission for a joint venture to build dorms and an indoor athletic facility.

The State Building Commission authorized the university’s plan to take bids for a public-private partnership for three multi-use student housing facilities on campus and construction of the infield practice facility.

The General Assembly will have to pass legislation enabling the Department of Transportation to enter a public-private partnership in which a company would invest the money in a road project, then recoup it through fees.

Under the UT-Knoxville proposal, which didn’t require legislative action, the university will “engage” a developer to design, construct, finance and maintain the buildings, which will meet growth needs and allow renovation or replacement of older dorms. The university is requesting proposals from developers on each project.

“The added facilities will help us meet our campus housing needs and position UT-K for anticipated enrollment growth while supporting the Volunteer student experience. This process has been utilized in various other states,” the university said in a statement.

It is unclear what impact these public-private partnerships would have on the university’s finances, though UT-K would remain in charge of dorm assignments and programming.

State transportation officials prefer to use the term “choice lanes” for their proposal on express routes, but Sen. Todd Gardenhire, R-Chattanooga, contends they are “toll roads” in essence because motorists would have to pay to drive on them.

The question is whether this is the wave of the future for Tennessee government operations in which it would ask the private sector to take control of building projects and maintain and operate them. Thirty-five states have authorized public-private partnerships for highways, and Tennessee could be the next.

The idea is to inject 80 percent of private investment in road projects, expedite the delivery of construction from the typical 15-year time frame and cut the cost of urban projects to free up money for rural road expansion.

Most lawmakers aren’t aware of the UT-K project, and they say they need more financial information about public-private partnerships on road construction before making a commitment.

State Sen. Todd Gardenhire, a Chattanooga Republican, believes proposals for express lanes, which would be paid for with motorist fees, would most likely be geared toward Nashville.

“I would have to see what the economics of it is and make sure it’s not more of a public with a capital P and private with a little p,” Gardenhire says.

He’s also uncertain how express routes or use of high-occupancy lanes would work differently than they do now.

Gardenhire contends that few drivers use the state’s high-occupancy vehicle lanes appropriately. During his trips on I-24, he sees the HOV lanes surrounding Nashville packed with vehicles carrying only one person, when they are supposed to be for two or more during rush hours, such as 7 to 9 a.m.

“People don’t even try to hide it anymore by putting a dummy with a hat on in the passenger seat,” Gardenhire says with a laugh. “They’re a waste of space.”

He appears willing to give them a chance, though.

“If somebody can figure out how to make it so I can pay a fee and get in there and blow it out going back home or coming to Nashville, that’s great,” Gardenhire adds.

Though state transportation officials prefer to use the term “choice lanes” for their proposal on express routes, Gardenhire, a member of the Senate Transportation Committee, contends they are “toll roads” in essence because motorists would have to pay to drive on them.

My big concern is the extent they’re talking about privately-owned toll roads or fast lanes. That’s going to be a dead end when it comes to Democratic support. We’re not going to back a plan that hands over state roadways to management, operation or ownership of a private entity.

– Rep. John Ray Clemmons, D-Nashville, House Democratic Caucus Leader

State officials, including Transportation Commissioner Butch Eley, the former founder and CEO of Infrastructure Corporation of America, proposed “choice lanes” and public-private partnerships in response to Gov. Bill Lee’s request to find ways to build more roads without raising taxes to meet a 9 percent growth rate over the last decade.

Eley’s old company is one of the nation’s leading asset maintenance management companies with contracts nationwide. DBi Services bought HDR | ICA Asset Management from Nebraska-based holding company HDR in 2018, the second sale of the company in three years.

Tennessee state Rep. Sam Whitson agrees with the need to find an innovative way to move traffic, and he believes Eley can get it done.

“I’m still driving on the same roads and interstates I’ve been driving on since I was 16 years old in the 1970s,” says Whitson, a Franklin Republican.

Whitson says he’s interested in finding out how options such as public-private partnerships would generate revenue to build “choice lanes” and express routes.

Butch Eley, Commissioner of the Tennessee Department of Transportation. Eley founded Infrastructure Corporation of America, highway management company. (Official photo)

House Democratic Caucus Chairman John Ray Clemmons is not enthused with the idea of allowing private entities to take control of tolling. Privatizing government services has been a goal of both Lee and former Gov. Bill Haslam, he points out.

“My big concern is the extent they’re talking about privately-owned toll roads or fast lanes. That’s going to be a dead end when it comes to Democratic support,” Clemmons says. “We’re not going to back a plan that hands over state roadways to management, operation or ownership of a private entity.”

Clemmons contends transportation and roadways are an “inherent governmental function” and the public needs accountability. The state could lose authority over rates and maintenance if it allows a private entity to control the roadway, he says.

“The last thing you want is somebody profiting off of somebody else’s inconvenience,” Clemmons says.

The Transportation Department is declining to discuss too many details or exactly how “choice lanes” would be monitored because it doesn’t want to get ahead of legislative action.

It contends state law not only prohibits public-private partnerships for highway projects, it also limits the number of “alternative delivery” projects the state can complete each year.

“All we are doing right now is asking the Legislature to change that in the Build With Us proposal so we can keep up with the growth Tennessee urban areas are experiencing,” TDOT spokeswoman Beth Emmons says.

TDOT says Texas and Georgia are good examples of how “choice lanes” or express routes work.

Eley and other state officials recently visited Dallas, Texas to review its “choice lanes,” which have seen a 10 percent increase in general traffic but with a 60-75 percent reduction in congestion and an average speed increase of 10-15 percent, according to the state.

The department points out many states with “choice lanes” use electronic transponders to track vehicles. Texas issues different types of fees to motorists who want to use its express lanes.

The Georgia Department of Transportation partners with the private sector for projects in which the contractor designs and builds the highway or takes complete control, designing, building, financing, operating and maintaining.

That state touts “expedited” completion compared to the normal time for delivery of a project, in addition to cost savings and improved quality along with the use of private resources and personnel to cut back on the need for public employees and funding. Access to private capital is another benefit, according to the Georgia Department of Transportation.

“We’re all over them. We are a believer and utilize them and will continue,” says Georgia state Rep. Rick Jasperse, a Jasper Republican who chairs the House Transportation Committee.

Known for having some of the worst traffic congestion in the nation but as a “transportation hub of the Southeast,” Georgia had to find a new method for building roads quicker and moving people faster, which impacts surrounding states such as Tennessee.

Georgia is in the midst of a project it calls a “P-3 heavy” on Atlanta’s north side along I-285 that will connect I-20 East to I-75 and then to I-20 West. The limited access road is to be funded, built, tolled and maintained by a third party and enables the state to embark on a project that, otherwise, would “overwhelm” the state’s budget, Jasperse says.

Another project calls for a truck route from Atlanta to Augusta in East Georgia.

“There is some state money in any of these projects, but it really helps us spread our money further and addresses true traffic needs,” he says.

In some instances, the private entity will take all of the risk on a project. In others, the state will pay back the price of construction plus interest, but state officials feel they can justify that expense because the road is completed in half the time of conventional methods, according to Jasperse.

“It’s not some damn giveaway either,” he says.

Jasperse is quick to note that bidding for these projects is highly competitive among multinational companies and contracts are heavily scrutinized.

Georgia motorists use what is called a Peach Pass, a small transponder or small electronic toll collection device that kicks in when they use an express lane. They’re also good in North Carolina and Florida.

Money is deducted from the motorist’s account, and violators receive a civil fine from the Georgia Toll Authority. No private tolling is done yet in Georgia.

A trip for Jasperse to Jasper in North Georgia can cost $2 to $8, depending on how jammed the interstate is around Atlanta. The minimum is 10 cents per mile.

“I have the choice. I don’t have to get on that road. I can stay on the five-lane highway or get on the express lane at a cost,” Jasperse says.

One possible drawback is that express lanes along interstates such as I-75 allow traffic to move in only one direction at different times of day. The lanes are closed for an hour when the direction is shifted.

Jasperse also acknowledges express lanes can get backed up too, but he says they don’t run into the same problems as the normal interstates. He believes it’s the right option, though, because the state has limited money and construction costs are increasing.

Jasperse also says it is critical to have a department of transportation and governor’s office that can be trusted to handle complex multi-year contracts and “to do what’s right and not to make screwy deals … or allow poor infrastructure that hurts us in the long run. Because you really get one shot.”

Tennessee Lookout is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com. Follow Tennessee Lookout on Facebook and Twitter.

Facing tens of billions of dollars in transportation project backlog, Gov. Bill Lee’s administration is proposing a patchwork of proposals designed to expedite work and raise more revenue, the most notable of which would institute toll roads or “choice lanes” built and maintained by the private sector through a state partnership.

The thinking is that Tennessee’s IMPROVE Act of 2017, a combination of fuel tax increases and vehicle registration fees, isn’t bringing in enough money to construct the roads and bridges needed to serve a state that grew by 9 percent over the last decade.

Tasked with finding alternatives to raising the fuel tax or taking on debt, Transportation Commissioner Butch Eley recently presented a list of options, including public-private partnerships on express lanes, creation of “choice lanes” on existing routes, raising electric vehicle fees, speeding up planning and bidding phases on construction projects and eliminating $34 million in unfilled Transportation Department positions and using that money to raise salaries for staff.

The response as the 113th General Assembly prepares to convene in January 2023 varies widely, with some lawmakers supporting and others raising questions.

Gov. Bill Lee is proposing public-private partnerships to create toll roads in Tennessee. Photo: John Partipilo)

“Mussolini liked those public-private partnerships. They called it fascism back then,” says Republican Sen. Frank Niceley, a Strawberry Plains farmer, referring to the early twentieth century Italian leader and the governor’s plan for toll or “choice lanes.” “I’m adamantly opposed to toll roads. Everybody in my district’s opposed to toll roads.”

Niceley points out that Texas adopted toll roads but mainly because it owed $20 billion for construction, in contrast to Tennessee, which holds no road work debt.

The Department of Transportation avoids the term “toll roads,” preferring “choice lanes” instead because motorists would have the option to use them and pay a rate to avoid slower traffic.

Other states use transponders to track vehicles’ use of “choice lanes,” but Tennessee hasn’t made a decision on how user fees would be collected here.

The Dallas, Texas area has a 100-mile TEXpress Lanes System of toll-managed lanes, with fees collected by the North Texas Tollway Authority through the use of three types of tags. Vehicles carrying more than one person can receive a 50 percent discount during peak travel periods during the week.

More than 60 managed price lanes exist in about 12 areas nationwide, mainly in California, around Washington, D.C., Florida, Texas, Atlanta, Charlotte, Seattle, Denver, Minneapolis and Salt Lake City.

Mussolini liked those public-private partnerships. They called it fascism back then.

– Sen. Frank Niceley, R-Strawberry Plains

The state points out on its Build With Us site that pricing managed lanes enables it to control congestion and help it keep pace with changing traffic volumes and “guarantee travel reliability.”

Getting into the details

The governor will need approval for any plan from the Legislature, as well as authority to set up multiple public-private partnerships for highway projects.

Tennessee officials are likely headed to Texas soon to see how its “choice lanes” and express system operate.

Lt. Gov. Randy McNally and House Speaker Cameron Sexton generally agree with Lee’s efforts to bolster the state’s road system and say they anticipate lively debate when the session starts.

“How quickly and efficiently people and goods can move across the state is directly related to our economic success,” McNally says. “I also agree that we should not abandon our pay-as-you-go system of road funding and that we must not increase the tax burden on our citizens.”

Says Sexton, “We must have honest discussions on infrastructure in our state to solve the traffic congestion issue. Those must include expansion of rail access, shortening the decades-long timeline to build roads, as well as looking at express lanes on our interstates in highly congested areas.”

Sexton doesn’t anticipate toll booths or mandatory toll roads but believes giving motorists the option to travel on an expressway will be considered.

The 2017 IMPROVE Act was projected to bring the state $1.081 billion from fiscal 2018 through fiscal 2022, and it is $5 million over projections. Yet gas tax revenue was down 4.4 percent through September and 2.5 percent through October this year, and state officials worry those dollars will continue to drop as electric vehicles take a bigger market share.

Thus, part of the proposal is to increase the $100 wheel tax on electric vehicles and bring it in line with the roughly $250 to $300 most motorists pay annually in fuel taxes.

The state has completed about 30 percent of the projects approved through the IMPROVE Act, and $16 billion worth of work remains. Another $26 billion of investments need to be made to deal with congestion across the state, according to TDOT.

Transportation officials haven’t put a dollar figure on the amount of money “choice lanes” would net. The idea is that a private company would invest its own money in the project and recoup expenses through fees.

State Sen. Becky Duncan Massey, chair of the Senate Transportation Committee, is willing to delve into the proposals because of the “exponential growth” in Tennessee and its impact on highways.

“The public-private partnership is looking at ways to build roads a little more efficiently, try to build them quicker, which saves us money,” Massey says.

“Choice lanes,” as long as they are an option and not the only way to reach a destination, are a “viable solution,” Massey adds.

The 2017 IMPROVE Act was projected to bring the state $1.081 billion from fiscal 2018 through fiscal 2022, and it is $5 million over projections — but gas tax revenue is down and state officials expect that it will continue to drop as more drivers transition to electric vehicles.

Massey, a Knoxville Republican, says her daughters have used an Austin, Texas toll road that enabled them to arrive at work in 15 minutes compared to a free route that took an hour. Even though they had to pay, the shorter ride equated to savings, she says.

While most lawmakers want to dig into the details, state Rep. Pat Marsh, a Shelbyville Republican and trucking company executive who serves on the House Transportation Committee, is ready to move on the governor’s entire plan.

Traveling to Nashville from his home along I-24 is “horrible,” he says. And traffic in neighboring Murfreesboro is nearly as bad. He typically dreads driving anywhere.

“I’m proud that (Gov. Lee) is saying he wants to tackle that problem,” Marsh says. The influx of new residents in Tennessee and the rising cost of road construction, 50 percent to 100 percent more, are driving the need for new solutions, Marsh says.

He compares the matter to reforming the way the state pays for education, though the governor’s solution drew criticism from much of the education community.

Democratic state Rep. Sam McKenzie of Knoxville, also a member of the House Transportation Committee, recalls that former Gov. Phil Bredesen discussed the idea of building a toll road from the interstate to Gatlinburg. The proposal didn’t draw much Republican support.

“We already pay a lot in gas taxes and from a transportation standpoint our roads are in really good condition. I give us a B-plus,” McKenzie says.

But if a road can be built as an “optional path” for a direct route into a town, he would support it. On the other hand, McKenzie says he would oppose a toll road that would cost the same amount for a wealthy motorist and someone making $15 an hour.

In addition, McKenzie says fees for electric vehicles should not be raised to match the amount motorists pay in fuel taxes, noting an incentive should be kept in place to purchase EVs.