Louisiana has hundreds of needed road projects, the most important of which is the completion of Interstate 49. I-49 North from Shreveport to the Arkansas line will be completed relatively soon. Now we need to get serious about the much more expensive ($5.2 billion) completion of I-49 South.
How can we afford I-49 South without ignoring the state’s many other infrastructure needs?
The I-49 South project is basically an upgrade of U.S. Highway 90 to interstate standards. U.S. 90 runs 140 miles from Lafayette to the Westbank Expressway in New Orleans, passing through nine parishes containing 36 percent of Louisiana’s population. U.S. 90, AKA “America’s Energy Corridor,” is one of the nation’s top 10 industrial corridors and provides access to four of the seven deep draft ports in Louisiana and nine airports with fixed based operations.
Eighty percent of the nation’s offshore oil and gas supply, almost 30 percent of the country’s energy consumption, comes from or through Louisiana. U.S. 90 makes this possible. Unfortunately, U.S. 90 has been operating over capacity for years, and by 2030 the deterioration will cause it to fail completely.
Completion of I-49 North and South will ensure that Louisiana can continue to meet America’s energy needs, create an international north-south trade corridor from the Louisiana Gulf Coast to Canada, keep our ports from losing business to Houston, improve hurricane evacuation, relieve traffic congestion, save lives and create over 100,000 jobs. These benefits will help the entire state.
So where do we get the money to finish I-49 South? The state does not have it; nor could we borrow it, even if we wanted to, under our constitutional debt limit. The feds have their own budget problems, starting with $14 trillion of sovereign debt. That leaves one possibility: someone else.
That “someone else” might be an infrastructure investment fund. An IIF raises funds from private investors to finance, design, build, operate and maintain a public project through a public-private partnership (PPP) in exchange for a return on the investment, usually 5 to 7 percent per year. A PPP is not a privatization; the government entity retains full control and ownership of the project.
The PPP model is not new. Many of the post-WWII roads in France, Italy, Portugal and Spain were built through PPPs. Australia began using PPPs in the 1980s and Latin America in the 1990s. Today PPPs can also be found in Canada, Europe and, yes, even the United States. The LBJ Freeway Express Lanes in Dallas, I-595 in Florida,
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| File image courtesy of UL Community Design Workshop | |
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Model of proposed design for I-49 through |
Virginia’s Dulles Greenway Highway and the Chicago Skyway Bridge are just a few of the projects built by IIFs through the PPP model. New York is presently considering one for a new $5.2 billion Tappan Zee Bridge.
Since 2005, the 30 largest IIFs have raised over $140 billion to invest in infrastructure. Interestingly, 27 of the 30 largest investors have been pension funds, which prefer the portfolio diversification that infrastructure investments offer.
There is, of course, no free lunch. An IIF expects a return on its investment, which would require Louisiana to come up with a guaranteed income stream over the life of the PPP. A portion of the state’s capital outlay budget could be dedicated to the project but it won’t be enough. The only other option is tolls, which is typically how PPPs are funded.
Support for tolls or a PPP for I-49 South could be mixed, as some will see tolls as a tax increase, and others will worry about allowing a private entity to manage a government asset. These are legitimate concerns, and perhaps a vote of the people would be in order. Much support or opposition would likely depend on the actual terms of the PPP, which must be transparent. But I do know this: There are no easy answers to the question of how to make I-49 South a reality and get this vital project built sooner rather than much later or not at all.
MAY 22 This post was written the day after the second line shooting in NOLA, by Brentin Mock. Mock is a friend of Deb "Big Red" Cotton, a blogger who was shot in the back and was seriously injured. It is a raw, emotional piece of writing, something the writer obviously felt he needed to get off his chest. But it raises questions that can't be easily dismissed, and might give some insight into where the source of these events truly is.
MAY 22 In this Baton Rouge Business Report post, Rolfe McCollister considers the privatization of bus service in Baton Rouge. After decades of under-funding, it is a mess, and although a tax (partially) passed last year, improvement hasn't happened yet. McCollister apparently feels it is time to let private business get in on the transit business.
MAY 22 This post on Bayou Buzz by Jeff Crouere urges the defeat of a bill that would grant modest pay increases over the next several years to the state's judges and clerks of court. The state is in no position to fund pay hikes, Crouere argues, with the pay increases costing a total of $9 million over several years. It sends the wrong message to the (proverbial) hard-working people of Louisiana, he says.
MAY 22 The Advocate reports here that State Treasurer John Kennedy is complaining about a meeting of the corporation that oversees the state's tobacco settlement. The Governor wanted it restructured, and he has some support, but not a lot. The corporation agreed with his plan, but Kennedy didn't, and it appears that the meeting was noticed in a manner completely different than that of all previous meetings. Kennedy's given to hyperbole, but in this case the fish don't smell too fresh.
MAY 22 In this Advocate story, Carencro Police Chief Carlos Stout says the recent federal indictment of a strip club owner is all wrong. The indictment alleges that drugs and prostitution went on with impunity because club staff made arrangements with "local" police. Stout says it never happened, and while his cops do work security in the parking lot, they're not allowed inside.
MAY 22 This amusing post in DIG Baton Rouge recounts an ad that ran on Craig's List recently; the advertiser was seeking tenants for a Beauregard Town house. He knew his market, and wrote an ad that the most ironical hipster couldn't resist. Apparently, he really did know his market, because the ad worked like a charm.
MAY 22 In this post in The Lens, Mark Moseley comments on the rhetoric Gov. Jindal employed in trying to save his tax "reform" package. One interesting point concerns Jindal's use of his brother, Nikesh, in a little story. Nikesh left Louisiana because of his inability to get a decent job, the story goes, but the story won't hold water: Nikesh lives in DC, which has an income tax level comparable to Louisiana, Moseley says. If income taxes caused the dismal situation, it should exist in DC too. Right?
MAY 22 This post by columnist John Maginnis traces the trajectory of the bill that would fund construction at community and technical colleges -- and bypass the Board of Regents and traditional higher ed funding mechanisms. Sure, it will bust the legislature's self-imposed debt limit, but some leges feel that there's more need (because there is more growth) in the community and technical college area than in the university area, he says.
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However they are in the poor neighborhood along the Evangeline Thruway. Now being a victim of one of those UL/Money grubber plans the city has helped to implelment, Joie De Vivre. I'm suspicious that the city will use this to make more of a land grab in this neighborhood. And no one is paying attention. We are gonna regret it.