Congressmen file bill to end PUBLIC subsidies for PRIVATE toll contracts

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Bills filed to stop ‘double dipping’ on private toll roads
By David Tanner
Landline Magazine
April 27, 2009
U.S. senators have filed a pair of bills to stop private-sector toll operators from double dipping into the pockets of taxpayers.

The Owner-Operator Independent Drivers Association applauded the move, saying the bills filed by Sen. Jeff Bingaman, D-NM, and Sen. Charles Grassley, R-IA, benefit highway users by eliminating subsidies for private toll roads.

“Taxpayers should never have been paying to provide these sweetheart benefits to the private sector to begin with,” OOIDA Director of Legislative Affairs Mike Joyce told Land Line.

“These two bills are a step in the right direction in protecting highway users from double – and even triple – taxation in deals that have gone down with the private sector.”

Bingaman and Grassley, both members of the Senate Finance Committee, introduced S884 and S885 to eliminate subsidies for privatized highways.

The first bill, S884, would stop states from receiving federal tax funding and private-sector money for the same toll road.

The other bill, S885, would put a limit on the toll operator’s current ability to write off the cost of the asset over the long term.

S885 would make it more difficult in the future for private investors to profit from subsidies, as happened with the privatization of the Chicago Skyway in Illinois. Private toll operator Cintra-Macquarie, a Spanish-Australian bank partnership, was allowed a 99-year tax write-off as part of the Skyway lease.

The Bingaman-Grassley legislation urges Congress to tighten up the tax write-off criteria.

“The tax code’s exceedingly generous cost-recovery provisions create a perverse incentive to tie up critical American infrastructure in private hands for generations to come,” Bingaman stated in a press release issued by both lawmakers.

“What we have is the tax tail wagging the dog, with dangerous consequences for America’s transportation policy. We must eliminate this perverse incentive and stop subsidizing these private highway operators – who are primarily Spanish and Australian banks – with American tax dollars.”

Grassley, the Senate Finance Committee’s top Republican, believes the bills will keep more taxpayer dollars in the Treasury for other projects.

“Our bills would protect taxpayers from the triple whammy of funding highway construction, giving generous tax breaks to private industry to maintain the infrastructure, and then paying tolls to use that infrastructure,” Grassley stated.

Both bills were sent to the Senate Finance Committee for review.

Joyce said a number of highway user groups are turning up in support of the bills.

“These are two extremely well-respected members of the Senate with a great knowledge in tax and financing issues. We applaud their actions on behalf of all truckers and all highway users,” Joyce said.

“We will fight side by side with them to see if we can get this language passed on its own or in the highway bill if need be.”

– By David Tanner, staff writer