Delaware's big appetite for outsiders' money

November 30, 2005|By JAY HANCOCK

Hope you enjoyed rotting in backups at the Delaware toll plaza over Thanksgiving, prolonging your trip, adding to Interstate 95's pollution and danger, and paying through the nose for the privilege.

Delaware offers outdated toll facilities charging what the American Trucking Associations call some of the highest per-mile fees in the country to people almost exclusively from other states.

Does it apologize? No!

The little state with the big appetite for outsiders' money looks like it'll be raking in even more. Despite having raised tolls this past summer to $3, Delaware still has a transportation-budget crisis, will probably increase tolls again and is considering wacky privatization schemes to raise even more money.

Delaware Transportation Secretary Nathan Hayward III favors a plan to lease I-95 or another road to private investors, Delaware newspapers report and a spokesman confirms.

This kind of deal, which has already driven up tolls in Chicago, threatens to give Wall Street a chokehold on the East Coast's economic windpipe.

How can Delaware politicians consider such a risk? Simple. They don't worry much about how I-95 works.

In fact, they encourage this sort of thing. Shaking down innocent passers-by and then delivering poor service in return is a politically pain-free way of filling Delaware's coffers.

Some 90 percent of the people who pay tolls at Delaware's I-95 plaza are non-Delawareans. The $100 million-plus they will pay next year will probably exceed a fourth of the Delaware Transportation Trust Fund's revenue, financing roads statewide.

I-95 tolls keep going up, but somehow in-state levies such as auto-registration fees don't. Delaware's legislature is so blase about I-95 toll increases that it has given transportation authorities carte blanche in the matter, although they go through the motions of getting approval.

Meanwhile, the state is years away from giving the I-95 toll plaza facilities that ameliorate backups by reading EZ Pass toll transponders at 40 mph or more.

And Delaware has failed to match Maryland in removing toll booths from the southbound portion of the Kennedy Memorial Highway, as the Maryland-Delaware stretch of I-95 is known.

(In Delaware's defense, it just gave trucks incentive to drive at night by lowering tolls after 10 p.m.)

The Germans have a name for this. Raubritter, they called the petty sovereigns whose castles lined the Rhine and Danube in the Middle Ages. Robber barons. The barons' high tolls on the rivers - the key commercial arteries of the day - delayed central-European economic development for centuries.

Sovereignties don't get much pettier than Delaware. Commercial arteries don't get much more crucial than I-95, which is a virtual ground-transportation monopoly to the most populous portions of the country.

Now Delaware (along with New Jersey, which is also mulling privatization) is considering surrendering the monopoly to private companies.

Does anyone see a problem?

The preliminary proposal, which goes to Gov. Ruth Ann Minner this week along with other revenue-raising ideas, looks beautiful for Delaware politicians, for potential investors, for Delaware voters - for everybody except the people who use I-95. (And 95 would almost certainly be the guinea pig. Officials would be terrified to try it on a road used mainly by Delawareans.)

Private companies would pay billions to lease I-95 and then make their money back by harvesting tolls over 50 or 100 years. The state would get the cash without selling new bonds and hurting its credit rating.

The companies collecting tolls would make big profits - much more, assuredly, than the 4.25 percent it would cost the state to borrow the money. Minner, Hayward and other politicians would be long gone if anything went bad.

And out-of-state drivers would bear almost all the cost, as in so many other parts of Delaware's budget. (Think Delaware's slot machines; its lack of sales tax, which lures outlanders to unwittingly underwrite Delaware's gross receipts tax; and its notorious tax shelters, which divert taxable corporate profits from neighbor states.)

Privatizing government functions often makes sense, even for roads. But not here. There are few efficiencies to be gained by privatizing I-95.

There is no market; users have practically zero alternatives, even if future proprietors septuple prices and let I-95 decay to potholes. (Although at this rate Delaware may make Amtrak look competitive.)

The only reason to do it is political expediency. And what is politically expedient for Delaware could hurt Maryland and other neighbors.

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