The Marquette Interchange is arguably the most important single component of Wisconsin’ s surface transportation infrastructure. Unfortunately, it is worn out and in urgent need of rebuilding. And because of the state’ s current budget-deficit situation, the total cost of rebuilding the Marquette — nearly $1.5 billion, using realistic numbers — is beyond the state’ s means. Further, there is very little prospect of obtaining significant “extra” federal aid for this very large project. And any significant reallocation of existing federal dollars from other Wisconsin projects toward the Marquette would meet certain opposition.

This report [See link below] proposes an alternative way of rebuilding the Marquette. Instead of scraping together the necessary
tax funds by starving other needed transportation projects of funding, or stretching out the project over a decade or
more (during which downtown Milwaukee would suffer greatly), we propose tapping private capital via a public/private partnership (PPP). The Marquette is a large and complex bridge. Major bridges are usually funded via long-term revenue bonds, to be repaid from tolls charged to users. This is a typical application of the PPP approach in transportation.

Public/private partnerships for large, complex infrastructure projects have been used for decades in Europe, and more recently in Australia and Latin America. During the 1990s they began to be used in the United States and Canada as well. PPP toll projects are in operation in California, Texas, and Virginia, as well as several Canadian provinces. Large urban toll projects in excess of $1 billion are in operation or under construction in Melbourne, Paris,
and Toronto. These projects, in particular, make use of fully automated tolling systems to generate revenue to pay for the facilities. These automated tolling systems are designed from the outset without any toll booths. All tolls are collected electronically, at normal highway speeds, either via a dashboard-mounted transponder (for regular users) or via license-plate imaging (for occasional users). All the inconvenience, traffic congestion, safety, and environmental concerns of traditional tolling would not occur on the Marquette.

For the Marquette, we have estimated the cost of a state-of-the-art automated tolling system (similar to that on Toronto’ s Highway 407) at $28 million. That is less than two percent of the total cost of this nearly $1.5 billion project.

Also, the operating and maintenance costs of such a system are estimated to be a small fraction of the cost of operating conventional toll collection with toll booths. Further, this type of tolling system gives everyone access to the facility, whether they open an account and obtain a transponder or not.

Our preliminary analysis suggests that the entire reconstruction project could be funded via a toll revenue bond issue. A baseline toll revenue stream of $165 million per year will support bonds in excess of the $1.5 billion project cost. This revenue number is based on rush-hour bridge tolls of $2 for cars and $10 for trucks, comparable to tolls on major bridges nationwide. Off-peak rates on weekdays and all day on weekends and holidays were assumed to be 30 percent less.

Wisconsinites are reported to contribute more than 40 percent of Illinois’ out-of-state toll revenues. Our proposal attempts to turn the tables by collecting $17 to $21 million each year from out-of-state users of the Marquette.

Ample legal authority exists at the federal level to carry out this project in the manner we have proposed. Federal surface transportation law provides for public/private partnerships, for using tolls to rebuild Interstate facilities, and for charging peak and off-peak toll rates. Indeed, the Federal Highway Administration encourages all three of these techniques. Wisconsin enacted a PPP law for transportation projects several years ago, but some fine-tuning would be needed to clarify the legal status of charging and enforcing electronic tolls and of using the design-build procurement
method for such projects.

We recognize and empathize with the concerns expressed by highway user groups (auto clubs and trucking associations) about

The Marquette Interchange is arguably the most important single component of Wisconsin’ s surface transportation infrastructure. Unfortunately, it is worn out and in urgent need of rebuilding. And because of the state’ s current budget-deficit situation, the total cost of rebuilding the Marquette — nearly $1.5 billion, using realistic numbers — is beyond the state’ s means. Further, there is very little prospect of obtaining significant “extra” federal aid for this very large project. And any significant reallocation of existing federal dollars from other Wisconsin projects toward the Marquette would meet certain opposition. This report [See link below] proposes an alternative way of rebuilding the Marquette. Instead of scraping together the necessary tax funds by starving other needed transportation projects of funding, or stretching out the project over a decade or more (during which downtown Milwaukee would suffer greatly), we propose tapping private capital via a public/private partnership (PPP). The Marquette is a large and complex bridge. Major bridges are usually funded via long-term revenue bonds, to be repaid from tolls charged to users. This is a typical application of the PPP approach in transportation. Public/private partnerships for large, complex infrastructure projects have been used for decades in Europe, and more recently in Australia and Latin America. During the 1990s they began to be used in the United States and Canada as well. PPP toll projects are in operation in California, Texas, and Virginia, as well as several Canadian provinces. Large urban toll projects in excess of $1 billion are in operation or under construction in Melbourne, Paris, and Toronto. These projects, in particular, make use of fully automated tolling systems to generate revenue to pay for the facilities. These automated tolling systems are designed from the outset without any toll booths. All tolls are collected electronically, at normal highway speeds, either via a dashboard-mounted transponder (for regular users) or via license-plate imaging (for occasional users). All the inconvenience, traffic congestion, safety, and environmental concerns of traditional tolling would not occur on the Marquette. For the Marquette, we have estimated the cost of a state-of-the-art automated tolling system (similar to that on Toronto’ s Highway 407) at $28 million. That is less than two percent of the total cost of this nearly $1.5 billion project. Also, the operating and maintenance costs of such a system are estimated to be a small fraction of the cost of operating conventional toll collection with toll booths. Further, this type of tolling system gives everyone access to the facility, whether they open an account and obtain a transponder or not. Our preliminary analysis suggests that the entire reconstruction project could be funded via a toll revenue bond issue. A baseline toll revenue stream of $165 million per year will support bonds in excess of the $1.5 billion project cost. This revenue number is based on rush-hour bridge tolls of $2 for cars and $10 for trucks, comparable to tolls on major bridges nationwide. Off-peak rates on weekdays and all day on weekends and holidays were assumed to be 30 percent less. Wisconsinites are reported to contribute more than 40 percent of Illinois’ out-of-state toll revenues. Our proposal attempts to turn the tables by collecting $17 to $21 million each year from out-of-state users of the Marquette. Ample legal authority exists at the federal level to carry out this project in the manner we have proposed. Federal surface transportation law provides for public/private partnerships, for using tolls to rebuild Interstate facilities, and for charging peak and off-peak toll rates. Indeed, the Federal Highway Administration encourages all three of these techniques. Wisconsin enacted a PPP law for transportation projects several years ago, but some fine-tuning would be needed to clarify the legal status of charging and enforcing electronic tolls and of using the design-build procurement method for such projects. We recognize and empathize with the concerns expressed by highway user groups (auto clubs and trucking associations) about ?double taxation? — i.e., paying both tolls and fuel taxes for the same highway facility. Our proposal therefore includes rebates of fuel tax liability incurred for the miles driven on the rebuilt Marquette. The proposed automated tolling system enables this to be done on an individual user basis in a reliable and cost-effective manner. A public/private partnership is a viable approach for rebuilding and modernizing this vital component of Wisconsin’s transportation infrastructure. It would permit the entire project to be completed in a four-year period, minimizing the period of disruption in downtown Milwaukee. And most important, it would free up close to $1.5 billion in federal and state transportation funds for other vitally needed transportation projects in the state, including the modernization of the Milwaukee-area freeway system. We hope Wisconsin’ s business and government leaders will embrace this new approach to meeting an urgent public need. ”Reason Director of Transportation Studies Bob Poole and Kevin Soucie show how outside-the-box thinking and entrepreneurial action can help Wisconsin (and other states) expand personal automobility by rebuilding decaying roads. See the Adobe Acrobat version of the January 2003 Policy Study No. 304 at:” https://www.rppi.org/ps304.pdf ”Originally published by Reason Foundation, which is a public policy think tank promoting choice, competition and a dynamic market economy as the foundation for human dignity and progress. For more information, contact Geoffrey Segal, Director of Privatization and Government Reform Policy at:” mailto:geoffrey.segal@reason.org ”Visit the Reason Web site at:” https://www.rppi.org ”or go to the Reason Public Policy Institute’s Privatization Center at:” https://www.privatization.org ”for information on government reform, privatization, contracting out and public/private partnerships.”

This president is thinking big. In his speech to the Economic Club of Chicago this week, President Bush surprised almost everyone with the size and boldness of his tax cut proposals. And when he delivers his State of the Union address on Jan. 28, all of the signals indicate that the president’s proposals for health reform also will be Texas-sized.

The budget numbers aren’t firm yet, but the president is expected to again offer refundable tax credits for the uninsured to obtain private health insurance. And the White House continues to send strong signals that Mr. Bush is determined to put his energies behind modernizing the decrepit Medicare program.

They insist it would be irresponsible to tack a prescription drug benefit on to a program that is facing trillions of dollars in unfunded liabilities. They plan to offer more choices of private plans for Medicare beneficiaries with prescription drug benefits available to all and special subsidies for lower-income beneficiaries. …

The White House is motivated because officials believe the 2004 elections could well swing on health-care issues. And the president is emboldened because, for the first time, the leadership on Capitol Hill is passionately committed to health reform.

The Wall Street Journal editorialized this week that “Republicans tend to approach health care policy the way the rest of us do a root canal,” but that is thankfully changing.

Senator Bill Frist gave up his post at the National Republican Senatorial Committee to devote his time and energies to health issues, long before he or anyone else had the slightest notion that he would soon hold the Senate’s top job. Dr. Frist has been a leader on tax credits and in introducing legislation to streamline Medicare through private-sector competition.

House Speaker Dennis Hastert and Ways and Means Chairman Bill Thomas, and other senior colleagues are even more experienced on health care and equally determined to make progress on free-market reform.

So expect big and bold proposals. It is, of course, absolutely accurate that the right way to institute a drug benefit is to make it part of an overall health plan, like virtually all plans in the private sector. But few members of Congress campaigned on the issue of Medicare modernization, and the first constituency that the president will have to convince to go along will be rank and file members of his own party.

How will all of this play out? We wish we had a crystal ball, but one thing is certain. President Bush already has recharted the debate from the dead end it hit last summer as the Senate voted on a series of mostly dreadful prescription drug bills.

The president told the Chicago economists, “The role of government is not to manage or control the economy from Washington, D.C., but to remove obstacles standing in the way?” That’s absolutely true about taxes, but it’s even more urgently important in the health sector.

There is so much private sector energy just ready to transform our health sector. The Galen Institute’s new Center for Consumer Driven Health Care, launched this week under the very able leadership of Greg Scandlen, will be working overtime to provide ideas and information to policymakers and the public about the importance of making progress on these issues. Join us on this exciting ride!

”’Grace-Marie Turner is founder and president of the Galen Institute in Alexandria, Va., which was started in 1995 to promote a more informed public debate over individual freedom, consumer choice, competition and diversity in the health sector. The Institute’s primary focus is sponsoring research and educational programs on the crucial intersection of health and tax policy. For more information, go to:”’ https://www.galen.org/ ”’To reach Grace Marie Turner, send email”’ mailto:galen@galen.org

This president is thinking big. In his speech to the Economic Club of Chicago this week, President Bush surprised almost everyone with the size and boldness of his tax cut proposals. And when he delivers his State of the Union address on Jan. 28, all of the signals indicate that the president’s proposals for health reform also will be Texas-sized. The budget numbers aren’t firm yet, but the president is expected to again offer refundable tax credits for the uninsured to obtain private health insurance. And the White House continues to send strong signals that Mr. Bush is determined to put his energies behind modernizing the decrepit Medicare program. They insist it would be irresponsible to tack a prescription drug benefit on to a program that is facing trillions of dollars in unfunded liabilities. They plan to offer more choices of private plans for Medicare beneficiaries with prescription drug benefits available to all and special subsidies for lower-income beneficiaries. … The White House is motivated because officials believe the 2004 elections could well swing on health-care issues. And the president is emboldened because, for the first time, the leadership on Capitol Hill is passionately committed to health reform. The Wall Street Journal editorialized this week that “Republicans tend to approach health care policy the way the rest of us do a root canal,” but that is thankfully changing. Senator Bill Frist gave up his post at the National Republican Senatorial Committee to devote his time and energies to health issues, long before he or anyone else had the slightest notion that he would soon hold the Senate’s top job. Dr. Frist has been a leader on tax credits and in introducing legislation to streamline Medicare through private-sector competition. House Speaker Dennis Hastert and Ways and Means Chairman Bill Thomas, and other senior colleagues are even more experienced on health care and equally determined to make progress on free-market reform. So expect big and bold proposals. It is, of course, absolutely accurate that the right way to institute a drug benefit is to make it part of an overall health plan, like virtually all plans in the private sector. But few members of Congress campaigned on the issue of Medicare modernization, and the first constituency that the president will have to convince to go along will be rank and file members of his own party. How will all of this play out? We wish we had a crystal ball, but one thing is certain. President Bush already has recharted the debate from the dead end it hit last summer as the Senate voted on a series of mostly dreadful prescription drug bills. The president told the Chicago economists, “The role of government is not to manage or control the economy from Washington, D.C., but to remove obstacles standing in the way?” That’s absolutely true about taxes, but it’s even more urgently important in the health sector. There is so much private sector energy just ready to transform our health sector. The Galen Institute’s new Center for Consumer Driven Health Care, launched this week under the very able leadership of Greg Scandlen, will be working overtime to provide ideas and information to policymakers and the public about the importance of making progress on these issues. Join us on this exciting ride! ”Grace-Marie Turner is founder and president of the Galen Institute in Alexandria, Va., which was started in 1995 to promote a more informed public debate over individual freedom, consumer choice, competition and diversity in the health sector. The Institute’s primary focus is sponsoring research and educational programs on the crucial intersection of health and tax policy. For more information, go to:” https://www.galen.org/ ”To reach Grace Marie Turner, send email” mailto:galen@galen.org