Blog Governors Assert States’ Rights On Public-Private Pacts
Ordinarily the National Governors Association (NGA) does not take a public position on statements made by individual congressional lawmakers. But, concerned about future transportation funding options, the NGA broke that rule recently to respond to a much-noticed warning from U.S. Rep. James Oberstar (D-MN) and U.S. Rep. Peter DeFazio (D-OR) against entering into public-private partnerships (PPPs), in which the legislators threatened to “undo” PPP agreements that did not conform to their conception of “the public interest.”
In a June 15 response to the congressmen, NGA chair Gov, Janet Napolitano (D-AZ), NGA Vice Chair Gov. Tim Pawlenty (R-MN), were joined by Gov. Dave Heineman (R-NE) and Jennifer Granholm (D-MI), chair and vice chair respectively of NGA’s Economic Development and Commerce Committee. They wrote:
“We believe Congress must work with states to advance our national transportation needs in a way that respects federalism and the states’ role as the primary steward of our national transportation network.”
“Fiscal pressures confronting the nation’s transportation system have prompted governors to look beyond traditional funding mechanisms such as bonding and state tolling to help finance and deliver on transportation. Burgeoning capacity needs and escalating operating and maintenance costs are driving states to pursue innovative financing options to complement traditional financing tools.”
The letter went on to say:
“While some governors may choose not to partner with the private sector …we are concerned that your position on PPP agreements may have already hardened against them, which could make it more difficult for states to use this tool for transportation improvements.”
Behind the governors’ decision to take this unusual step was a sentiment that the Oberstar/DeFazio challenge to the principles of federalism must not remain unanswered. Couched in polite terms was an unmistakable message: “Do not meddle in what properly is the states’ business. Let us be the judge of what is in our states’ best public interest.” The governors’ strong reaction (an earlier version of their letter was even stronger, we’ve been told) could not have gone unnoticed.
But by inviting the congressmen “to engage constructively with the states” in a dialogue how to improve the state-federal partnership, the governors have left the door open to a less confrontational dialogue. We hope that future exchanges will avoid recriminations and focus constructively on how to address the budgetary shortfalls facing the state transportation programs.
As Rep. John Mica (R-FL), the committee’s ranking member observed, Congress has failed to come up with adequate resources to help states meet their infrastructure funding needs, so states are moving on their own to fill the vacuum. For many states this means resorting to tolls to supplement existing sources of transportation revenue and soliciting private sector help to finance future highway capacity.
States have come to this conclusion not because they are ideologically committed to “privatization” but because, pragmatically, they view the prospects for significant increases in the fuel tax — both at the state and federal level — as remote in these times of record high fuel prices. If there are other ways out of the fiscal quandary, state officials assure us, they will be more than happy to explore them with congressional lawmakers.
(Note to readers: Ken Orski is a veteran observer and analyst of transportation policy and politics; he is based in the Washington, D.C. area. Cascadia Prospectus is pleased to have Mr. Orski on board as a new contributor. His bio is here; his first post for the blog is here).
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