Alternative Funding

You know that I have gotten on my privatization high horse more than once before, but it looks like on the other side of the Potomac the idea might get put to good use in a very unusual way:

Robert F. McDonnell, the Republican candidate for governor of Virginia, proposed Tuesday handing over about 330 state-run liquor stores to private operators to pay for road improvements -- a novel way to fund fixes but one that confronts many of the same obstacles that have stalled previous efforts.

For those of you that don't know, all alcohol in Virginia is sold in state-owned ABC stores. McDonnell's proposal would generate half-a-billion dollars in immediate revenue to deal with transportation woes in Northern Virginia, where there is strong opposition to both new taxes, but also in a reduction in funding of education to pay for it.

While this proposal comes from a Republican, and does not solve all of Virginia's long-term revenue needs when it comes to transportation, it is one logical and reasonable alternative to raising taxes and fees in order to keep state government running. Maybe Martin O'Malley can take the hint and realizes that there are, in fact, alternatives to trying to squeeze every last red cent out of Maryland's taxpayers....

Privatization a Serious Option

I have been calling for some time now the privatization of state assets, mainly as a way to improve services and reduce state spending. Now that state budgets are actually up against the wall, it looks like momentum for such common sense solutions is bulding:

Minnesota is deep in the hole financially, but the state still owns a premier golf resort, a sprawling amateur sports complex, a big airport, a major zoo and land holdings the size of the Central American country of Belize.

Valuables like these are in for a closer look as 44 states cope with deficits.

Like families pawning the silver to get through a tight spot, states such as Minnesota, New York, Massachusetts and Illinois are thinking of selling or leasing toll roads, parks, lotteries and other assets to raise desperately needed cash.

Minnesota Gov. Tim Pawlenty has hinted that his January budget proposal will include proposals to privatize some of what the state owns or does. The Republican is looking for cash to help close a $5.27 billion deficit without raising taxes.

And if you notice, it is a wide variety of states that are looking at privatization measures. Big government states such as New York, Massachusetts, and Illinois are looking at the benefits to maximizing efficiency by utilizing the private sector.

Unfortunately, I have no reason to believe that such common sense will seep in here to Maryland, even if a small step was taken in August when the state considered privatization for the Seagirt Marine Terminal. At minimum, Maryland needs to be looking at privatizing the Maryland Transportation Authority assets as well as the assets and operation of the notoriously mismanaged Maryland Transit Administration. Such a minimal privatization plan will save millions of dollars for Maryland taxpayers, and provide taxpayers with better services at lower costs.

At the very least, Maryland needs to consider how we can maximize the use of our state owned assets to deal with aftermath of the reckless fiscal policies of the O'Malley Administration. There is an opportunity here for the state and its taxpayers, if the Administration and General Assembly can resist their default settings and take advantage of it.

Privatization option still marginalized

Once again, alternatives to the current Bay Bridge situation are being floated and discussed. And once again, the idea is being debated within a framework that only allows for state funding and state construction of such an improvement.

Why not the private sector? Why not a privatized ferry system? Why not a privatized third span? Why are we so stuck in the muck that Maryland will not consider privatized alternatives? Every time I think we've turned the corner on this issue, we find ourselves right back at square one.

Instead, we get stupid stuff like this:

The MTA isn't enamored with either idea. It is focusing more on short-term solutions to make the existing bridge spans more driver-friendly.

Last week, the MTA increased Eastern Shore commuter bus service. They also believe changes in driver habits, like increased E-ZPass usage, could ease traffic flow along the bridge.

That's right, let's focus on fixing what's already broken in the short term, and try to punt on anything that could really make a lasting impact in the long run.

A privatized third span of course would be wildly popular, and would easily allow a private contractor to make their money back in a relatively reasonable fashion. A privatized ferry system could work if it is done correctly and made attractive to commuters. I have used the ferry system in Washington State, and it is very user friendly, very efficient, and while not entirely cheap, it saves a boatload of time that would otherwise be spent on roads. A car and passenger ferry that docked in downtown Baltimore, for example, may even remove cars from Baltimore streets if it allows workers the possibility of walking or biking to work from the ferry port, something done extensively by Ferry Commuters in Washington State.

Something is needed to relieve the stress on the current Bay Bridge spans. Public safety demands the issue. Government cannot afford to build them on its own, nor can government allow Luddites to complicate the matter. We need to allow the private sector to undertake these projects....

No need to wait to start building Third Span

Long before Sunday morning's tragic accident on the Bay Bridge, the need has been existent for a new span across the Chesapeake Bay. This has little to do with the accident, and everything to do with traffic, congestion, and public safety.

Well Paul Foer, ever the voice of failure and bad public policy, spouted off about how horrible that thought was:

It was not long after the recent fatal crash on our Bay Bridges (yes there are two of them as well as the bridge-tunnel near Norfolk) that some clamored for another crossing, a third span...yada yada yada...Okay-how often is there a fatal or serious crash on the bridges? Well they happen, but seriously, how often? Any more than on any other busy road? Of course the aftermath of tie-ups is worse, but does this mean we need another bridge? Sure, if you just want to build and develop and slash and burn, go ahead and make another bridge.

Of course, the construction of the new bridge has little to do with growth and little to do with development. Those are county zoning issues that are not impacted by the state. True, it may make the Eastern Shore more accessible, but isn't that the point of building a new span? Not necessarily for development, but to allow to improve the economy and to provide a more adequate public safety capability for the Shore?

I mean, does anybody really want to see a 25-mile backup on Route 50 if thousands of Eastern Shore residents are trying to evacuate to the Western Shore due to an imminently landfalling hurricane? Because even with a contraflow traffic pattern, five lanes going westbound would not be able to handle that capacity in an emergency, and if an accident were to close one of the spans during that evacuation the impact could be catastrophic.

Foer continues:

But we cannot build our way out of this one. The first crossing was in 1952 and then just 21 years later we opened a second one. Even if we could and did build a third to open in five years or so, would we find ourselves crying for another--a fourth crossing in the year 2020 or 2025? And we must ask ourselves that given what we can reasonably expect about the future of oil and all energy, as well as the environmental concerns, are we sure we really want to keep building as usual, imposing 1950's solutions on 21st and 22nd century challenges? If traffic is the problem and cars and roads make traffic, why would we want to continue adding cars and roads in order to alleviate traffic? Surely the argument is vastly more complex than I make it here, but we must really face the facts and ask ourselves if building more roads and highways is a viable or even sustainable option.

Obviously, Foer wants to talk about the need for a fourth span when we haven't even built the third span. As usually, Foer goes straight for the strawman argument that we may need to do more in the future. Well, not if you plan appropriately now. I have called for a six-lane span to be built at the current site, which would allow for eleven lanes of traffic crossing the Bay. And the span can even be constructed in a manner that allows multi-modal transportation options, including light or heavy rail, and dedicated rapid bus transit lanes. That's not a "1950's solution"; that's a solution that looks toward the future and allows for considerable relief options for transportation planners.

And if Foer wants to make an environmental argument, I say this: isn't it more environmentally sound for traffic to move at a reasonable rate than to have a five-mile backup of cars inefficiently spewing pollutants into the atmosphere?

Then, because Foer has no intelligible points to make, he switches over to yelling:

THE DAYS OF CHEAP OIL ARE OVER. EVENTUALLY WE WILL RUN OUT. EVERY ALTERNATIVE IS FRAUGHT WITH DIFFICULTY AND DOWNSIDES. HOWEVER, WE MUST FACE THE FACTS AND THEY ARE THAT WE CANNOT BUILD OURSELVES OUT OF TRAFFIC CONGESTION. IT MAY HAVE WORKED IN SOME PLACES FOR SOME TIMES, BUT THOSE DAYS ARE BEHIND US.

Of course, we can build ourselves out of congestion by adding highway lane-miles to our infrastructure. Foer says we can't, because only because the thought makes him unhappy and he likes to pout. Obviously if you expand highway capacity, you reduce highway congestion. Even a third-grader could figure that out.

The ostrich philosophy of the left, that by sticking our head in the sand and hoping our traffic problems disappear, is problematic. We do not have a transportation infrastructure that can sustain the amount of traffic in the area, the legacy of the de-mapping trend from the 60's and 70's (something I wrote about three years ago). Not dealing with the issue, by not adding more lane-miles to Maryland's transportation system, we are doing little but to further degrade the economic, public safety, and yes environmental posture of our state..

We have the capability to do this, to not only build a third span, but also improve mass transit options, through privatization as I have long been advocating. This project needs to be started, and started as quickly as humanly possible.

Ray of Hope

As many of you know I have long been an advocate of privatizing many state government operations in an effort to save taxpayers money and in an effort to provide a more streamlined, efficient government. Of course, I figured that such an idea was little more than a pipe dream in an era dominated by the wasteful spending and lack of competence displayed by the O'Malley Administration.

Needless to say, I was stunned to read this in the Sun this morning regarding the Port of Baltimore:

Hiring a private contractor to run Seagirt under a long-term lease is one possible avenue the state could pursue by mid-2009. The operator would assume complete control of Seagirt - the berths, cranes, containers, asphalt, everything but the land itself - and cough up millions for projects that the state feels it can't afford. "We'd say, 'Here's the keys: you operate it for 30 years and continue to improve the facility so you can continue to handle the ships that operate there,' " said James J. White, the port administration's executive director.

"We have to create an environment that's better than other ports so the ship owners want to come here...."

...Private operators bidding on Seagirt should propose to substantially raise its container volumes, White said. The MPA expects to hire a Wall Street firm by October to determine the prospects of a public-private partnership for Seagirt. The financial adviser would then draft a concession agreement that the port would float to the private sector. The state could also decide to extend Ports America's contract or find another Seagirt tenant instead of forging ahead with privatization.

The prospect of a 20- to-30-year contract for the control of Seagirt should attract bids from at least 8 to 10 operators, said White, the MPA's director. Both Ports America and the Mediterranean Shipping Co. say they would bid on a long-term lease.

"There's going to be tremendous interest in this," White said. "We would turn our portfolio over to them and say: 'This is the business that we have today. You honor these contracts, be responsible for renewing them and bring in new business."

Let's give the devil its due on this one; I am pleased as punch that anybody in the O'Malley Administration is giving consideration to rational and sensible economic policies such as the option of privatization. Clearly, the State of Maryland is not the best equipped entity to run a port facility, much like they are not the entity best equipped to operate highways, prisons, or mass transit. And I am sure that there are private contractors out there who will be able to provide a great deal to the taxpayers of Maryland in order to improve the port, raise its economic viability, and provide jobs to the people of the Baltimore Area.

The O'Malley Administration has been plagued by bad decision making, cockamamie tax proposals, and general economic tomfoolery during the past 19 months. I am glad to see that there is, in fact, a Ray of Light coming from the Administration in at least one economic sector.

There are options

The ever incompetent Maryland Transit Administration seems to think that there is no way for them to fund their proposed Red Line project:

New cost projections for a proposed east-west transit line across Baltimore show that the most widely favored alternatives are too expensive to qualify for federal funding, while the only clearly affordable choices are ones already rejected by City Hall.

Cost-effectiveness figures released this week by the Maryland Transit Administration for the proposed Red Line show alternatives that involve tunneling to put portions of the line underground exceed the federal standard for consideration of 50 percent funding of the project....

...All of them exceeded the figure of $24 per hour of user benefit that Federal Transit Administration uses as its cut-off line for judging the cost-effectiveness of competing transit proposals.

The two proposals involving the most tunneling - and the least potential disruption to neighborhoods - came in so far over the mark that MTA officials said it is practically impossible to fund them.

It seems like the rut that MTA and other leaders are stuck in (as usual) is the thought that the only source of revenue available to fund the project is through taxpayer dollars from both the state and federal governments. But we all know that this is exactly the kind of project that will simply waste taxpayer dollars and create enormous cost overruns.

It sounds like the exact kind of project that a private company could build for a fraction of the price it would cost the government.

If the MTA and public officials are serious about building the Red Line, they should really step back and consider their options. Privatization is the most cost effective way to get this project down, and this would be the perfect test case to be able to prove that point...

Private Ventures

Looks like NASA is starting to finally get real (H/T Instapundit)

For decades, NASA kept a tight fist around the construction and operation of the spacecraft that ferried its astronauts and hardware into orbit. Sure, an army of private contractors actually built the vehicles, but NASA oversaw the designs—and always kept the pink slips. Now, however, the agency seems to be shifting course, as NASA officials insist that the budding commercial spacecraft fleet represents the only way the United States can realize its dreams of solar-system conquest on schedule and at an affordable cost.

Because of a new focus for NASA's strategic investments—not to mention incentives like the Ansari X Prize, which spurred the space-tourism business, and the Google Lunar X Prize, which could do the same for payloads—private-sector spaceships could be ready for government service soon, says Sam Scimemi, who heads NASA's Commercial Orbital Transportation Services program. "The industry has grown up," he tells PM. "It used to be that only NASA or the Air Force could do such things....."

....."I'd like for us to get to the point where we have the kind of private/public synergy in space flight that we have had for a hundred years in aviation," Griffin said. The spirit of private enterprise is crucial to the future of space exploration, he acknowledged. "I see a day in the not-very-distant future where instead of NASA buying a vehicle, we buy a ticket for our astronauts to ride to low Earth orbit, or a bill of lading for a cargo delivery to space station by a private operator. I want us to get to that point."

Hauling cargo represents the grunt work of space exploration and, dominated by the space shuttle, it has long gobbled millions of dollars of NASA's budget. The agency's new vision hands that duty off to private companies that, freed from government paperwork, can do it more economically. This would free up more of the NASA budget for space exploration missions, Scimemi says.

And this is exactly what NASA should have been doing for years. The NASA monopoly on government-backed space missions has always seemed silly particularly, as the story notes, since all of the components and crafts were being built by private contractors.

As we have seen time and time again, privatization of certain government functions gives the taxpayer more flexibility, more options, and a better product with less overhead, less bureaucracy, and lower costs. Let's just hope that NASA's newfound vision of the space program not only spreads to other agencies at the federal and (hopefully) state level, but also survives the next Presidential administration. I have a fear that such innovations will suffer under a Democratic administration....

Momentum for Privatization

Looks like other people are picking up on the idea that only privatization may be all that we can do to save our transportation infrastructure:

Free markets may be the only way to save the nation's roads and highways. They might even be the best way to save them. The Department of Transportation, under this Administration, has made no secret of its desire to lease highways to private companies, to use tolls and congestion pricing, to auction off fast access to those willing to pay and to otherwise let free markets drive transportation. Under this view, breaking up the government monopoly on transportation could lead to innovation and more choices for the public. Let those who use a resource pay for it, without burdening everyone else with the costs. Let the pain of price ease gridlock. It will reduce both fuel consumption and emissions. Heck, it might even drive down your insurance premiums.

Let us hope that we get to this point. Privatization may not be the solution for every state, nor the solution for every transportation method. But there is a pretty good chance that privatization will lead to all of the things that Marty Jerome's post suggests: innovation, consumer choice, and lower costs. And these should be concepts that all citizens, both left and right, can get behind...

More Fuel for Privatization Fire

Maybe the State of Maryland, even in our current O'Malleynomic hell, may really consider the concept of privatization:

And in the long-term, MdTA will be so saddled with debt it might even have to lease one of its facilities to a private partner, according to DLS. Over the next four years, the agency will issue $2.8 billion worth of debt to bolster its capital budget.

Now all of this is in a story about how MdTA might be ready to jack the price of tolls on the Bay Bridge up to $5.00 in the near future. But as I have argued before, the privatization of the Bay Bridge may make it cheaper for taxpayers and commuters to use the bridge, as a private toll facility operator will be able to operate the bridge at a far lower cost than the State of Maryland ever could.

Even ardent opponents of privatization don't want to see tolls doubled on MdTA facilities, and privatization may be a way to avoid that current inevitability.

Lots of Democrats and liberals talk about brining innovation to government. I can assure you that doubling tolls does not count as innovation in anyone's mind. But I think that one of the most innovate things that Maryland could do at this moment in time is to privatize our toll facilities so that we, both as commuters and as taxpayers, get the biggest bang for our buck.

Stupid Government Tricks

Good grief:

Maryland Stadium Authority chairman Frederick W. Puddester has begun discussions with legislators about creating a statewide panel to attract more sports and entertainment events to facilities around Maryland.

The authority works with a panel of businessmen to attract events to Camden Yards and M&T Bank Stadium. But Puddester wants an inventory of all the facilities in the state and an analysis of how they might be marketed. He said he wants to see all parts of the state benefit from attracting events.

Works cannot adequately describe how silly this is, especially considering yesterday the story was all about how the MTA should be focusing on transit-oriented development.

Of course, Puddester's idea is harebrained. Should not the Stadium Authority concern itself only with facilities they own? Are they talking about a panel to push events towards non-state facilities? Is this some sort of scheme to try to take control of certain venues for the Stadium Authority? What exactly does Puddester have up his sleeve?

As usual, this seems like a poorly constructed cockamamie scheme coming from a professional bureaucrat. I've already shown my support for abolishing the Stadium Authority and privatizing the venues, but at the very least the Stadium Authority needs to stay out of the event promotion business when they are already private companies that, you know, do that sort of thing.

Privatized Transit in the Dulles Corridor?

Lots of our liberal friends criticize me for my stance on the private funding on transportation infrastructure, but it looks like such ideas are being bandied about for the construction of Metro's Northern Virginia Silver Line:

Private equity investors are drawing up proposals to partner with Virginia for a rail line to Dulles International Airport as hope fades that the federal government will help fund the 23-mile Metrorail extension.

State officials said several equity groups have expressed interest in investing in a rail since Thursday, when U.S. transportation officials declared the project unfit for federal funding. The $5 billion project had been counting on a $900 million grant from the Federal Transit Administration.

Private purchase of the rail line or the Dulles Toll Road to fund the extension would attract strong opposition from those who believe such public infrastructure is far too valuable to hand over to for-profit corporations. But with the outlook for keeping the rail project alive bleak, regional business and political leaders who are adamant that the rail line must not die are increasingly of the mind that private partnership must be considered.

"You gotta build this thing," said William D. Lecos, president of the Fairfax County Chamber of Commerce. "So whatever contingency is fastest, bestest and quickest is good with us. We've always been supportive of the public-private concept. If that turns out now to be the contingency we can pursue, provided we can get on that course quickly and with some level of certainty, then that's what we should do."

Folks in Northern Virginia have been looking for over 25 years for a Dulles rail extension, and with the disqualification of the project from receiving federal funds, it looked liked the project may never get built. Now, with private companies in the mix, it looks like there is still hope for the project. When you consider how much of the Dulles Corridor's planning is tied into the future of this line, it remains and important project for the future of this area.

I hope that the private companies get a legitimate chance to build and operate this system. It will show, hopefully once and for all, that there can be a great public benefit to privatized transportation options in our area.

Privatization still the solution

This article from this morning's Post further reinforces the need to privatize transportation construction:

State transportation officials say Columbia's future might not include rail transit despite pleas to extend such service to the county's largest community.

Howard Del. Elizabeth Bobo (D) asked state officials last year to study whether Washington's Metro rail system or the MARC, the state's commuter rail service, could run to Columbia. But state officials have told Bobo in recent weeks that both options would cost billions over the next 30 years, a prohibitive expense. That should provide local officials with "a little dose of reality," Bobo said.

"We can't move forward thinking we're going to have [rail] transit anytime soon in downtown Columbia," Bobo said after a meeting of Maryland transportation officials in Ellicott City last week.

But they could move forward if a bid went out to private contractors to determine the costs to build such a system privately. I would be willing to be that a number of companies would be willing to build and operate a Metro, MARC, or Light Rail extension if given the opportunity to bid. The concept that a multi-billion project such as this has to be constructed using only state funds is outmoded, and leads to further traffic delays, congestion, and projects that take fifty years to complete.

As I noted last month, the privatization of such projects is the only way to make progress.