Leasing Roads Could Cost Drivers

November 26, 2007

By MIKE BRASSFIELD / St. Petersburg Times  

TAMPA | Picture the Sunshine Skyway under the control of profit-driven investment bankers instead of state bureaucrats. That could lead to soaring tolls on the bridge, which has charged the same price for a quarter-century.

But faced with a $2.5 billion budget shortfall over the next two years, Gov. Charlie Crist and state transportation officials are considering selling 50-year leases on Florida toll roads such as the Skyway, the Pinellas Bayway and Alligator Alley in exchange for large sums of cash up front.

Other local toll roads such as the Polk Parkway, Veterans Expressway, Suncoast Parkway and Lee Roy Selmon Crosstown Expressway are off the table. They are part of Florida Turnpike Enterprise and can't easily be leased because they're all part of a system that's tied together financially.

"We won't do it unless it is good for the state," Crist has said repeatedly.

There is no doubt that road privatization can be lucrative in the short term, with the cash-strapped state potentially raking in billions. Indiana, Chicago and several foreign countries already have done the same thing. Supporters argue that Florida will only end up with more gridlock if it doesn't come up with creative ways to raise money for road construction.

But over the long run, would drivers be getting a raw deal?

It would mean handing over the operation and maintenance of a toll road or bridge to a private company, which could raise prices at the toll booth and keep most of the revenue. Critics say the state would be letting investors make fat profits from aggressive toll hikes.

Judging from public records obtained from the governor's office and the Florida Department of Transportation, it's clear officials are running the numbers, trying to figure out what would be a fair deal.

They're also looking at leasing Alligator Alley first, because the Skyway and Bayway have maintenance issues.

How much would drivers pay?

No free ride

Today it costs $1 in cash or 75 cents with a SunPass to cross the Skyway in a car. The state says that's low compared with similar bridges. (The Golden Gate Bridge costs $5.) The Skyway's price has stayed the same since 1982, although lawmakers have come close to raising it a couple of times.

Under new management, prices would certainly go up.

In a preliminary study, the Transportation Department estimated a 50-year lease on the Skyway could be worth $1.3 billion if investors were allowed to set tolls at "market rates." The study used the example of the SunPass toll, which would double in the first, fourth and 10th years of the deal, climbing from 75 cents to $5 within a decade.

A more politically palatable deal would raise tolls by 50 percent starting in the first, fourth and 10th years. In a decade, Skyway drivers would be paying $3.50 in cash or $2.50 via SunPass. More price hikes would follow in the 40 years after that. A lease with those conditions could net the state $477 million.

And leasing Alligator Alley, which runs between Naples and Fort Lauderdale, could bring in between $500 million and $1.3 billion, depending on how high the toll could rise - either to $6.75 or a whopping $10 in the first decade.

Any deal would come after negotiations over how expensive the tolls could get over a full, 50-year span. It also would require public hearings and legislative approval.

Proponents of this idea make the point that companies don't raise their prices high enough to scare off customers. There's no reason for a private firm to hike tolls to the point where no one is using the road, said Rep. Gary Aubuchon, a Cape Coral Republican. He co-sponsored a bill earlier this year that paved the way for the leasing of toll roads.

Also, tolls will start creeping upward incrementally no matter what, thanks to a new law that indexes them to inflation.

But critics say private investors would still hike tolls more aggressively than the government, disproportionately hurting low-income drivers.

Worth the PRICE?

Alligator Alley has emerged as the state's prime candidate for privatization. It got picked through a process of elimination.

A law passed this year allows Florida to lease toll roads that are operated by the Transportation Department, but not by Florida Turnpike Enterprise.

That leaves four roads: the Alley, the Skyway, the Pinellas Bayway and a state-owned stretch of the BeachLine Expressway (formerly the Bee Line) in Central Florida.

But the upkeep costs of the Tampa Bay area's toll bridges would lower the price that investors would be willing to pay for them. Florida officials fear they wouldn't get enough cash to make the deal worth it.

Sunshine Skyway: The 20-year-old landmark has undergone major repairs for corroded columns, worn-out 20-ton expansion joints, and peeling paint on its distinctive yellow suspension cables.

The $18 million collected each year at its toll booths pays for its upkeep, with the extra revenue funneled to road construction in neighboring Pinellas and Manatee counties.

Pinellas Bayway: It's in worse shape. Its two 45-year-old bridges were supposed to have been replaced by now. In fact, the Transportation Department will hold a public meeting Wednesday night in St. Pete Beach to discuss raising tolls to pay for that.

Alligator Alley: The long, flat road through the Everglades has lots of bridges to let water and wildlife pass underneath. Those require upkeep. But as the only east-west highway in South Florida, it's a virtual monopoly.

Why consider doing this in the first place?

Because Florida's traditional way of building roads is starting to break down, becoming too costly.