Task force seeks roadwork funding

By Sam Harvey
Staff Reporter

There’s been a fair bit of finger-pointing since the Delaware Department of Transportation (DelDOT) suddenly shelved $283 million in road projects last month. Legislators have blamed DelDOT for drawing down the Transportation Enhancement Fund, historically intended to cover capital construction projects, but increasingly used to fund operating budgets.

DelDOT representatives have countered that the General Assembly perennially blocked efforts to raise fees, to keep revenue growth on pace with expenditures.

Moving onward, Gov. Ruth Ann Minner has appointed a task force to look into new revenue options to replenish the Transportation Enhancement Fund, and local Sen. George Howard Bunting (20th District) reported progress at a task force meeting on Aug. 8.

He noted roughly 30 people in attendance, including his neighbor to the west, Sen. Bob Venables (21st District), plus Senate Majority Whip Anthony DeLuca, Bond Bill Chairman Rep. Roger Roy, Senate Minority Leader John Still, and House Majority Leader Wayne Smith, among others.

Staff from the Office of the Controller General and the State Budget Office, a representative from Goldman Sachs, DelDOT Secretary Nathan Hayward and DelDOT Director of Planning Ralph Reeb rounded out the crowd.

“I think it was a good meeting — we kicked a lot of things around, trying to find a common track,” Bunting said. “I think the key here is, this is a budget matter — we’re looking at funding a certain number and working from there.”

For instance, when Hayward talked about $4 billion in outstanding road projects, Bunting said he’d thrown absolutely everything onto the stack, monorail and all. “I don’t think that was completely realistic,” he pointed out

Still, as local Rep. Gerald Hocker (38th District) noted, DelDOT had been working from a $353 million list of projects around Sussex County when the budgetary axe fell.

A new, flagship Indian River Inlet Bridge is still locked into foreseeable budgets. However, even that project has suffered its setbacks, with initial cost estimates of $180 million swelling by 27 percent (to $229 million). The original timeline for bridge construction has been extended by at least a year, and while steel prices could conceivably cool, project delays more typically lead to additional project costs.

(To date, the federal government has earmarked a $51.2 million share.)

Hocker said local road problems consistently topped his list of complaints from constituents, and (not including the bridge project) wherever DelDOT reprogrammed funds initially projected for work in Sussex County (bridge project aside), he said the task force would definitely need to find some additional revenue sources.

However, the group may already be whittling away at the options.

Although Bunting suggested fee schedule increases (document and registration, etc.) were still on the table, any increases to the gas tax were likely not.

And he characterized privatization as the most controversial of the three, although from DelDOT’s perspective, everything stays on the table until someone tells them otherwise.

Hayward has started to outline some of the elements of public-private partnerships (PPPs), for legislators’ edification. If the state moved in that direction at all, Bunting suggested it would more likely be on either I-95, or Truck Route 301 (probably not on the Route 1 bypass.)

However, he anticipated a long learning curve ahead before public-private clears the discussion stage. To date, bankers have brokered only one PPP deal in the U.S. — $1.8 billion for a 99-year concession to operate and collect tolls on the 7.8-mile Chicago Skyway, to Spain’s Cintra S.A. (Australia’s Macquarie was involved as well, but Cintra quickly bought them out at initial public offering.)

Hocker said he was opposed to privatization, both practically and in principle. “I can’t see any advantage to that, really,” he pointed out. As he suggested, tax revenues lost in PPPs overshadowed any upfront benefits. “You take money out of the pocket, you have to put it back somewhere,” Hocker stated. “I’m totally against it.”

Bunting said he wasn’t necessarily against privatization, but said it didn’t seem to fit with either I-95 or 301. He dredged up the public versus private debate that surrounded the Indian River Marina project when it was first built. The marina eventually went public — “Could a private company have run it better? I don’t know,” Bunting said.

However, he noted the risk of falling into a “What else can we privatize?” mentality, perpetually avoiding the underlying issue — “That we haven’t been as good custodians of the money as we should have been,” as Bunting characterized it.

He reserved a portion of blame for DelDOT as well, though, pointing to safety problems on Sussex roads where projects will be delayed.

Hocker agreed. “When you say you’re going to put something off for a year, that doesn’t sound too bad — but we’re already 15 years behind,” he said. While government is increasingly asking developers to share costs to allay impacts on road infrastructure, he lamented the delayed reaction.

“One thing’s for sure — we’re going to have to work together to come up with a plan,” he said. “Yes, this is the state’s problem, but the counties and towns are part of the problem, too, and we’re going to have to work this out together.”

Bunting said he’d received an earful following his suggestion that the county might need to feel some of the state’s pain, to match revenue gains from development.

He expressed skepticism at the possibility of bringing a portion of local real estate transfer tax revenues back to the state. “(Sussex County Administrator) Bob Stickels is extremely upset,” he said. “Politically, I think the counties are going to beat us to death on this.”

As he clarified, he didn’t expect local jurisdictions to foot the lion’s share, but he suggested it might be appropriate for them to contribute something.

He didn’t blame the county, or towns, for approving new developments based on the existing Comprehensive Land Use Plans. Those plans basically carried the force of law, he said, and there would always be a private attorney at the ready if the county strayed from its regulatory demesne.

However, in a climate where towns and county were approving “subdivision after subdivision after subdivision,” he said it might be time for some new land use plans.