These threats include a lack of funding. When one considers the current situation from this perspective, the importance of finding a solution to the problem of how to fund the highway system becomes one of the most important topics that the government faces.
The need for finding is obvious. We have already mentioned the possibility of raising taxes as a means to fund the necessary maintenance and expansion. However, the government is reluctant to take this route for fear of public repercussions. Raising taxes in the amounts needed could lead to devastating economic impacts. This is not the answer for obvious reasons.
The original highway system of the United States was built by private enterprise. It was a sector of the American economy and was maintained through funds collected for use of the highway. One solution that has been suggest is that the highway system be returned to private enterprise and they be allowed to collect funds for the maintenance of the roads, as well as to take a little profit for themselves. There are many sides to this argument. There is also a proposal that calls for an integrated effort between the Federal Government and Private entities. The follow will discuss arguments on both sides of the issue.
The privatization of the highway system in the United States will result in many currently public roads becoming toll roads. Drivers will have to pay their portion of the maintenance of these roads as a result of their use of this resource. There are many ways to look at this issue. From one perspective, the American taxpayer already pays for the road system through gasoline and other taxes. There are fears that allowing private companies to use the highway system as a source of income would allow for price gouging. Privatization of the highway system would still generate funds through corporate taxes that could be used for the maintenance of public roads. Taxes would still be a part of the picture. Corporate taxes could generate more funds that the taxes paid by private citizens. Corporations are taxed at a higher rate and the amount upon which they are taxed is higher as well (Decorla-Souza, p. 239). This issue is often not addressed in literature regarding the highway finding issue.
Aside from the fears about price gouging if the highway system comes under private ownership are fears about security. In the post-9/11 world, this is always a concern. However, when one looks at this issue realistically, this threat also affects many other portions of the infrastructure such as air travel, the power grid and vital urban services. Private entities, such as chemical factories have already solved many of these issues successfully. Private highway companies could look to these other systems as a source of information on how to resolve these issues. Competition will be a major component of the negotiations in this state. This is not a standard component in private/public contracts, but is will play a role in future development around the DC area (Decorla-Souza, p. 239)
Everyone makes the assumption that private enterprise will be successful. However, if we take private investment in Spain as an example, we learn that during the 1970s costs exceeded estimates by private entities. The companies running the toll roads went bankrupt and the government had to bail them out (Engel, Fischer, and Galetovic, p. 20). This cost the public more than if they had funded the roads themselves. Three is some downside risk that must be considered in this decision.
Now let examine some of the key proposals and companies involved in toll roads in the United States. Two of the key firms that are considering entrance into the highway system in the United States are Macquirie, an Australian firm and Cintra, a firm from Spain (Cho, p. 38). One of he key concerns is that income from these enterprises will benefit Australia and Spain more than they will benefit the U.S. In terms of revenues. The sale of toll roads to private entities is a growing trend in Canada, Asia, and Europe (Samuel, pp. 5-14).
We have several examples of the privatization process in the United States already. In 2007, Mayor Daley of Chicago signed over a stretch of road called the Chicago Skyway (Cho, p. 38). The lease term will be for 99 years. The Chicago Skyway was once a member of what was called "one of the worst run government agencies in the nation" (Samuel, p. 1). One of the key concerns in the Chicago Skyway were how to accomplish needed repairs and expansion with minimal disturbance...
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