The Washington PostDemocracy Dies in Darkness

Maryland lawmakers question why state needs private financing for Beltway, I-270 toll lanes

The state’s transportation chief said he’s trying to find a ‘compromise’ to move the highway expansion plan forward

Traffic on the Beltway in Bethesda. (Katherine Frey/The Washington Post)

Maryland lawmakers on Tuesday questioned why state transportation officials haven’t proved their contention that having private firms add toll lanes to the Capital Beltway and Interstate 270 would provide the most cost-efficient traffic relief.

At a legislative hearing on a potentially $50 million contract to design the lanes, analysts for the Maryland General Assembly said state officials had told them twice they would provide a “value-for-money study.” Government agencies, including the Virginia Department of Transportation, often compare the overall costs of publicly financing a road project vs. the private sector doing so in exchange for keeping the toll revenue long-term.

Some lawmakers questioned whether using less-expensive government financing would allow the state to add two reversible lanes rather than the state’s four-lane plan, which would be more lucrative for the private sector.

Maryland scales back most controversial part of Beltway toll lanes plan

“We don’t know — the analysis hasn’t been done,” said Steven McCulloch, of the Department of Legislative Services. “There’s never been a rigorous analysis released to the public or released to the General Assembly to see what it would take” to build the lanes with government financing.

The hearing came as the Maryland Department of Transportation plans to seek approval in July of a “predevelopment agreement” in which two Australian firms — toll-road operator Transurban and investment bank Macquarie — would design the lanes before seeking a 50-year contract to finance, build and operate them. Under the agreement, the state would have to reimburse the companies up to $50 million of their costs if the state canceled their part of the project, such as if it decided to finance and build the project itself.

Maryland board preliminarily approves contract for Australian firms to develop Beltway, I-270 toll lanes

State transportation officials previously have said they haven’t done such a study because MDOT doesn’t have the funding or debt capacity to finance the project.

On Tuesday, Maryland Transportation Secretary Gregory Slater said the state will release an analysis after the firms have finalized construction costs. Even if the state decided to take over the project, he said, MDOT would pay up to $50 million to essentially buy the detailed designs. Moreover, he said, the state’s “very, very detailed analysis” found that two reversible lanes “had a lot of challenges” in accommodating future traffic from population growth, compared with four lanes.

Some lawmakers said the state shouldn’t sign any predevelopment agreement — and, in turn, risk having to pay up to $50 million — until it determines whether it should use government financing. Releasing such a financial analysis on the eve of signing a 50-year construction and operations contract could be too late, lawmakers opposed to the project said.

“I question the timing of it and how valuable it’s going to be at that time,” said Del. Marc A. Korman (D-Montgomery), chairman of the House Appropriations subcommittee on transportation and the environment.

Del. Jared Solomon (D-Montgomery), another toll lanes plan critic, added, “If we are truly evaluating the pluses and minuses of both options, we should be doing it before any money has been shelled out or any contract has been signed.”

Maryland board approves proposed toll rates for Beltway, I-270 toll lanes

Under Maryland law, legislators can comment on a public-private partnership contract, including the predevelopment agreement, but they don’t get to vote on it. Final approval would be granted by the state’s Board of Public Works — composed of Gov. Larry Hogan (R), treasurer Nancy K. Kopp (D) and comptroller Peter Franchot (D) — in a vote that MDOT officials have said they will seek next month.

Hogan has said the project would come at “no net cost” to taxpayers because a team of companies would build the lanes and finance their construction in exchange for keeping most of the toll revenue over 50 years.

Hogan has proposed the toll lanes — two in each direction — on I-270 and the western part of the Beltway as a way to relieve traffic congestion and widen the bottleneck at the aging American Legion Bridge with a new structure. Opponents say Hogan’s plan shortchanges transit expansion and would worsen greenhouse gas emissions.

D.C.-area officials deal major below to Maryland toll lanes proposal

The proposal suffered a major blow June 16, when the region’s Transportation Planning Board removed it from a federally required air-quality analysis, which would prevent the project from securing federal environmental approval. Slater said Tuesday he is trying to find a “compromise” with Montgomery officials who oppose the project and led the opposition at the planning board.

Slater also clarified that the state would have to cut $1.5 billion worth of other road and transit projects if it doesn’t get the private financing it’s counting on to replace the American Legion Bridge. A June 21 letter from MDOT to the Transportation Planning Board had implied the state would have to cut $6 billion worth of other projects.