Last July, we detailed a plan to privatize the Boulder Turnpike -- a deal the Colorado Department of Transportation supports under the theory that it will help finance U.S. 36 improvements much more quickly than if only public funds are used.
The folks with Boulder's Drive SunShine Institute couldn't disagree more. They're filing a lawsuit intended to block the contract and are organizing a protest tomorrow to sketch out the reasons they see it as a boondoggle in the making.
"The privatization of U.S. 36 will present a large financial cost to Colorado taxpayers," maintains Ken Beitel, clean energy analyst and DSI spokesman. "Hundreds of millions of dollars in toll revenues on U.S. 36 will be drained out of Colorado to provide profits for Goldman Sachs and the Australian toll road developer the Plenary Group."
As we noted in our 2013 post, Goldman Sachs is officially designated as CDOT's "financial adviser," while Plenary Roads Denver has agreed to pay approximately two-thirds of the cost for renovations to both the Boulder Turnpike and Interstate 25 in exchange for collecting all new tolls on U.S. 36 and the existing I-25 express lanes for the length of the contract -- fifty years.
In addition, the toll lanes will eschew the common designation known as HOV2 -- meaning that vehicles can use high-occupancy lanes without charge if two people are riding in them -- in favor of a three-person requirement known as HOV3.
That sounds like a mighty sweet set-up for Plenary and Goldman Sachs. But in an interview last year, CDOT spokeswoman Amy Ford said Colorado drivers would benefit as well. She touted privatization on these routes as a practical way to speed up construction. "We would not have been able to construct the next phase" of U.S. 36 construction "for probably twenty years," she said.
This pitch doesn't convince Beitel, who sees other drawbacks beyond revenue issues.
"Privatization of Colorado highways means loss of public policy control for the highways," he allows. "For example, the U.S. 36 fifty-year contract states that vehicles with a driver and one passenger will have to pay tolls in the express lane during rush hour -- and the prices are estimated at from $10 to $28 for a round trip from Denver to Boulder. And the State of Colorado will never be able to change that.
"If we want to change it back from the new three-plus standard to two-plus, Colorado taxpayers would have to pay Plenary millions of dollars in compensation for the remainder of the fifty-year contract."
In addition, he goes on, "if municipalities around U.S. 36, like Westminster and the Town of Superior, want to upgrade roads that impact toll revenue on U.S. 36, that would also be illegal unless compensation is paid." Continue for more about the plan to privatize the Boulder Turnpike. In Beitel's opinion, CDOT's claims that privatization will make improvements happen decades sooner than under other circumstances is "basically marketing propaganda. The Drive SunShine Institute, in partnership with other organizations, has laid out a concise, four-point revenue plan that would make sure no public highway in Colorado ever needs to be converted into a toll road."
In the proposal, money would come from marijuana sales tax revenue, plus what Beitel characterizes as modest increases in fuel taxes and a severance tax on oil-and-gas production, and a flat tax on income over $500,000 that he calls "small."
As for other options, Beitel believes they were short-circuited. "I spoke at a transportation briefing last week at the Capitol, and Senator Matt Jones expressed it very well. He's very involved in transportation issues, but he was never told there was a shortfall on the U.S. 36 project. Colorado legislators never had a chance to provide public financing for the project, and Senator Jones says if he had known about it, the state could have come up with the $120 million to finance U.S. 36 without privatizing it."
Jones is among the signatories on a letter asking for the signing of the contract to be pushed back. It's on view below.
These matters helped inspired a lawsuit Beitel says will be filed tomorrow. "What we're calling for is a sixty-day hold on the fifty-year contract signing," which is expected to take place within the week, "and a cost-benefit analysis of using private sector dollars versus public financing.
"The grounds for the lawsuit is a 2009 environmental-impact assessment for U.S. 36, which is deeply flawed," he adds. "It states that the carbon emissions fro the 100,000 vehicles that travel the highway daily are a drop in the bucket -- but two policies of a privatized U.S. 36 will greatly increase carbon emissions.
"HOV3 means a majority of Colorado drivers will give up car pooling, since it's hard to find one friend to car pool with, let alone two -- and that will lead to more cars on the road. And secondly, the fifty-year contract makes it impossible to incentivize electric vehicles using the HOV lane. California and Florida are seeing great success with that, but with privatization, it will be illegal for the State of Colorado to allow electric vehicles to travel in the HOV lanes without paying compensation to Plenary for the length of the contract."
Of course, the success of such arguments isn't guaranteed, and in a Boulder Daily Camera article, CDOT's Ford is quoted as saying a suit wouldn't "necessarily stop the financial close." But DSI is also taking its criticism public via a "Freedom Vigil" getting underway at noon tomorrow, February 19, at CDOT's headquarters, 4201 East Arkansas Avenue in Denver. For more information, click here.
Beitel hopes these various tactics will help put the brakes on a plan he sees as hurting Colorado for many years to come. "We believe the privatization of highways is like a high-interest credit card," he says. "The State of Colorado gets immediate money, but the taxpayers have to pay a high price in tolls over the next fifty years."
Here's the aforementioned privatization letter signed by Senator Matt Jones.
Send your story tips to the author, Michael Roberts.
More from our News archive circa July 2013: "HOV3: When and why two-occupant cars will have to pay to use I-25, US 36 express lanes."