Commentary

Budget & Tax News (March 2006 Issue)
March 1, 2006

Private Consortium to Help Ease Atlanta's Traffic Woes
Georgia’s public-private initiative moves closer
By Benita M. Dodd and Robert W. Poole, Jr.

Commuters in Georgia's metro Atlanta region are moving closer to congestion relief with the historic approval by the State Transportation Board of a letter of intent (LOI) to negotiate a public-private initiative (PPI) for transportation improvements in the crowded Interstate 75-575 corridor.

The LOI, approved in December 2005 with Georgia Transportation Partners, a private consortium, is non-binding on both sides, but it paves the way for the project to move forward on the specifics. The LOI outlines proposals for managed lanes, a Bus Rapid Transit (BRT) system, and barrier-separated truck-only lanes.

The project would not toll existing lanes, nor is the PPI consortium proposing that it be involved in the tolling of lanes. Toll revenues, however, would back the bonds to fund an expected $512 million debt for the $1.8 billion project. The tolls would come from the State Roads and Toll Authority or a private company tolling that stretch of road on any lanes added during the project, an initiative that will take form during the negotiations.

Without the PPI the project would cost an estimated $2.9 billion and take nine years longer to complete, according to the state Department of Transportation.

Supplements Other Funds

Atlanta is the nation's fourth-most-congested urban area, with a travel time index of 1.44, meaning it takes 44 percent longer to get somewhere at rush hour than at other times. Even if the region's current $53 billion long-range transportation plan is fully implemented, congestion will grow to a travel time index of 1.67 by 2030, according to Georgia transportation department estimates. Funding constraints mean the region's current long-range plan adds little to the highway system's capacity despite a projected population increase of 2.5 million by 2030.

Federal funding is unlikely to meet the challenge. The National Chamber Foundation of the U.S. Chamber of Commerce recently stated that to maintain the nation's current transportation system, "all levels of government must invest $235 billion in 2006, $304 billion in 2015, and $472 billion in 2030."

More importantly, the foundation pointed out, "Current revenue streams will fall far short of these levels--the cumulative shortfall through 2015 is $0.5 trillion." The foundation added that even an unprecedented indexing of fuel taxes to inflation would be insufficient to address long-term funding shortfalls.

Aggressive Schedule a Must

Sam Olens wears three hats as he approaches this initiative. He is chairman of commissioners for Cobb County, whose commuters will benefit enormously from the corridor improvements. He also heads the region's Metropolitan Planning Organization and chairs the Governor's Congestion Mitigation Task Force, which must present Gov. Sonny Perdue (R) with a multi-agency proposal to prioritize traffic congestion relief in transportation-related projects.

Much is at risk with this first and most promising PPI, Olens warns. The Georgia DOT and the consortium "must fully commit to an aggressive schedule to satisfy the federal standards for highway design and safety as well as the DOT's internal processes," he said.

David Doss, chairman of the state Board of Transportation, is already looking to the future. "The I-75/575 PPI is the first of what I hope is a series of PPIs forthcoming in the very near future to allow us to greatly accelerate congestion relief for the metro Atlanta area," Doss said.

Truck-Only Lanes Key

Doss sees truck-only lanes as a "particularly exciting component because of the dramatic impact those lanes will have on congestion mitigation." Olens concurs, predicting their success "will bring such lanes throughout much of the [Interstate-285] perimeter, leading to meaningful safety improvements because freight traffic is growing much faster than other traffic." Interstate 285 is the interstate highway that encircles Atlanta.

A sticking point may be in finding agreement among the consortium, the Georgia DOT, and trucking interests on the design, use, and tolling of truck-only lanes, but the agency appears committed to including input from the industry as the concept takes shape.

Bus Transit Also Important

Steve Stancil, executive director of the Georgia Regional Transportation Authority, likes the opportunity for cost-effective and attractive public transportation. The BRT component would improve transit trip times, he said.

"This public-private partnership can get it done," said Stancil. "And it benefits commuters, the region, and taxpayers by relieving congestion at a faster pace and a lower cost."

Looking at the work ahead, Doss acknowledges the project's imposing scale. "I have been adamant that the first PPI in Georgia be a home run for both the public sector and the private partner; its success will make future proposals so much easier," he said.

"In my opinion, the state's first public-private partnership proposal, Georgia 316 [which faced public opposition because it proposed to toll existing lanes], didn't meet that criterion," Doss said. "The I-75/I-575 initiative is not just a home run, it's a grand slam."

Benita M. Dodd is vice president of the Georgia Public Policy Foundation. Robert W. Poole is director of transportation at Reason Foundation. This column first appeared in Budget & Tax News, published by the Heartland Institute. An archive of Poole's work is here and Reason's transportation research and commentary is here.