Las Vegas Sun

March 29, 2024

Privatization in toll-lane plan not sitting well with legislators

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The state’s plan to introduce Nevadans to privately operated toll lanes is being sold as a way to create a high-speed path along Las Vegas’ most congested corridors without taxpayers footing the bill.

Much of the project, however, would take miles of existing lanes on U.S. 95 and Interstate 15 and turn them over to a private company that would charge tolls to use the lanes and special off-ramps built at the company’s expense.

As the Nevada Transportation Department makes a last-ditch push this week for its $1 billion Pioneer Program, department Director Susan Martinovich has glossed over the proposed surrender of lanes built with tax dollars to a private company, according to a number of lobbyists and legislators. Left unsaid during Martinovich’s testimony before lawmakers is that four lanes of I-15 between the Las Vegas Beltway and the Spaghetti Bowl would be toll lanes, the lobbyists and legislators said.

Martinovich defended the proposal, saying it will provide desperately needed funding for transportation without a tax hike and benefit the public by providing motorists and transit riders with more options.

“Those who are willing to pay will free up congestion on the general purpose road,” she said. “You, as a taxpayer, can make a choice.”

The project has met stiff resistance from lawmakers, who have been particularly concerned about its call for existing lanes to be turned over to a private developer.

“Roads paid for by the taxpayer need to be left for the taxpayer,” said Sen. Barbara Cegavske, R-Las Vegas. “If we paid for the road, a private developer can’t come in and feed at the trough and charge people to ride on it.”

Lanes under construction on I-15 — one in each direction between the Las Vegas Beltway and the Spaghetti Bowl — would eventually be turned into privately run toll lanes along with an existing lane in each direction. When the lanes being built open this fall, drivers would be able to use them free at first. Martinovich acknowledged that under the Pioneer Program, two free lanes in each direction would become toll lanes. But through restriping and taking away some shoulder, a free lane in each direction would be restored, she said.

The legislation needed for the project to move forward faces an uncertain future.

Martinovich said she hopes to have the bill heard today. Friday is the deadline for most policy bills to pass out of committee.

Sen. John Lee, D-North Las Vegas, has a bill that would set parameters for toll projects in Nevada, including a prohibition on existing lanes being converted to toll lanes. The Transportation Department and some lobbyists pushed for an amendment to exempt the Pioneer Program from the prohibition, but the Senate deleted the amendment last week.

The transfer of existing lanes from public to private hands hasn’t been the only concern. Legislators and some road advocates note that such public-private partnerships have resulted in long-term agreements that left taxpayers holding the bag while private companies charged huge tolls and profited handsomely.

“My concerns aren’t with the (Pioneer) project on its face,” said Paul Enos, president of the Nevada Truckers Association. “My concern is that public-private partnerships have been structured to the detriment of states.”

The private company that would partner with the state hasn’t been determined, officials said. The state has awarded nearly $6 million in contracts with consultants to advise the department on engineering, financial and legal matters related to the project.

During a hearing last week Senate Transportation Committee members were curious about the potential ties of Dan Musgrove, a lobbyist with the McDonald Carano Wilson law firm, who testified in support of the Pioneer Program. The firm has extensive links with the Gibbons administration. It hired Mike Dayton, the governor’s former chief of staff, last year, and attorneys at the firm have helped Gibbons during his campaign and with his legal defense fund.

Musgrove originally identified himself as representing the Southern Nevada chapter of a commercial development association. Under questions from lawmakers, he also acknowledged that he had worked for Transurban Group, a toll road developer.

After the meeting, Musgrove said he helped facilitate meetings between Transurban, the Transportation Department and governor’s office. But he said Transurban is not currently a client of the law firm.

To address concerns about the transparency of such agreements, Assembly Democrats have a bill that would require the treasurer to hire an independent financial firm to study such partnerships, as well as other financial agreements the state enters into with private entities. Agreements would have to be approved by the state Board of Finance.

Martinovich acknowledged that other states have been taken advantage of in public-private partnerships. But, she said, “we have learned from other states’ mistakes.”

Martinovich also argues that the private partner would assume the risk if the project doesn’t work out. And the state Transportation Board, which meets in public, would serve as a check to make sure taxpayers aren’t being taken advantage of, she said.

Toll costs and other details would be set by the board.

During last week’s Senate transportation hearing, Sen. Dennis Nolan, R-Las Vegas, defended the toll project as the best alternative to alleviate congestion given the state’s fiscal crisis.

“If we don’t fund highways, we sit in gridlock. It’s what we need to do,” he said. The alternative is a huge increase in the gas tax to pay for $4 billion in unfunded road projects in Nevada.

Sen. Maggie Carlton, D-Las Vegas, disagreed.

“The ground that belongs to the state is going to be sublet to these public-private partnerships,” she said. “People of the state of Nevada are going to get charged for using it.”

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