Members of a state committee dueled verbally Thursday with a lobbyist defending Gov. Larry Hogan’s proposal to add toll lanes to I-495 and I-270.
The House of Delegates panel considered three more proposals to place conditions on the public-private partnership (P3) the governor hopes to use to add capacity to the two interstate highways.
For the most part, legislators attending the Environment and Transportation Committee hearing contended that P3s — such as Hogan’s plan to use private firms to finance, build and operate the $9 billion to $11 billion 495/270 widening — needed more General Assembly oversight.
At present, the power to move ahead with such public-private partnerships is almost entirely vested in the three-member state Board of Public Works, consisting of the governor, comptroller and treasurer.
“We have a transportation system in Maryland that makes the legislature into bystanders to a very great extent,” Environment and Transportation Committee Chair Kumar Barve (D-Rockville) said in an interview prior to the hearing. “My feeling is that the legislature needs to be more of an equal player in this.”
In turn, advocates of the 495/270 P3 proposal — led by former Maryland Republican Party Chair John Kane — charged during the hearing that the latest pieces of legislation would scare off prospective investors and were little more than critics of Hogan’s plan delaying the widening project. Kane is now a lobbyist representing Citizens for Traffic Relief, a Rockville-based business coalition.
Nearly 90 minutes of hearings on bills proposed by Barve and Dels. Marc Korman (D-Bethesda) and Jared Solomon (D-Silver Spring) culminated with an exasperated Del. Brooke Lierman (D-Baltimore City) telling Kane: “Here’s what I just heard from the testimony that you gave to us: The General Assembly spooks investors. You don’t think the General Assembly should have similar levels of oversight that our colleagues in Florida and other states do … and you think our elected officials reviewing contracts is simply bureaucratic [and that] we shouldn’t have input into these massively important funding projects.”
Kane called Lierman’s statement “an overexaggeration of what we think,” but added, “I would respond by saying only 10 states ask for and have what Florida has” in terms of legislative oversight.
Kane pointedly told the committee: “We’re fighting upstream. I know the majority of you don’t support the P3, you don’t like the P3 — and you want the control and power to be able to say, ‘Stop it or give us a significant amount of input into it to slow it down’.”
The bills heard in the committee Thursday included:
- Barve’s proposal to limit tolls on bridges and roads built using the P3 approach — which he dubbed the “No Lexus Lanes Act” — to 10 cents a mile, unless the Board of Public Works expressly authorized higher tolls.
- A bill by Korman, entitled the “Maryland Department of Transportation Promises Act,” to codify agreements reached in January between Hogan and Comptroller Peter Franchot. The Board of Public Works voted 2-1 at the time to move ahead with plans to widen the American Legion Bridge, along with the western section of I-495 and the lower part of I-270.
- Solomon’s bill — “Public-Private Partnerships – Process and Oversight” — which, among other provisions, would create a new entity, the Public-Private Partnership Oversight and Review Board, to vet to future P3 projects. It would give the General Assembly up to a year to review such projects before the Board of Public Works votes on them.
In an interview before the hearing, Barve wouldn’t specify what P3-related legislation will move out of his committee this year, but asserted, “We’re going to move something.”
In addition to his own bill, Barve is among the cosponsors of Korman’s bill and was a supporter of a version of Solomon’s legislation that passed the House of Delegates in 2019.
However, Barve appeared to suggest that another pending P3 proposal — legislation by Del. Mary Lehman (D-Prince George’s County) to give counties in the state veto power over toll roads and bridges with a major presence within those boundaries — would not move out of his committee.
Lehman’s bill, along with a companion bill by Sen. Susan Lee (D-Bethesda), were the subject of hearings earlier in this year’s session.
“I do know the senior leadership in both chambers are not interested in this kind of a bill,” Barve said of the Lee-Lehman legislation, which was also proposed in 2019. “I guess the fundamental philosophical question that has to be asked is, ‘What’s the point of having a state government if local counties can nullify policy?’”
In letters to the Environment and Transportation Committee dated Thursday, the Maryland Department of Transportation (MDOT) stated its opposition to Barve’s bill.
MDOT took no position on Korman’s legislation — although it expressed concern about potential precedents. MDOT reserved its sharpest criticism for Solomon’s legislation in a four-page, single-spaced letter.
After clearing the House of Delegates last year, Solomon’s bill — containing many of the same provisions as this year’s legislation — died in the Senate Budget and Taxation Committee after then-MDOT Secretary Pete Rahn lobbied strongly against it, according to sources.
Rahn is said to have contended that passage of the bill would have slowed down the 495/270 project by as much as two years due to requirements that an environmental impact statement be finalized before the project could proceed.
However, given subsequent votes in the Board of Public Works — in June 2019 and this January — to proceed with the 495/270 project, Solomon said during Thursday’s hearing that his bill would only affect the timing of future P3 projects. “The I-95/270 project has already been designated as a P3 — so most of the pieces in this bill … would not apply to this project,” Solomon said.
He said the one portion of his bill that would still apply to the 495/270 project involved enhanced financial review by the state treasurer’s office of private bidders interested in becoming the P3’s “concessionaire.”
State Treasurer Nancy Kopp appeared at the hearing to endorse amendments to Solomon’s legislation that she said would let credit rating agencies assess the impact of P3 projects on the state’s ability to borrow money, while also allowing for risk analyses by the state’s financial advisers.
“There’s a robust fear among a lot of folks that you could have a whole series of shell corporations created for these projects,” Solomon said in an interview, “and these shell corporations could be attached to entities that have had a terrible track record — and we as legislators and taxpayers would have no idea.”
Notwithstanding Solomon’s contention that his bill would otherwise not affect the 495/270 P3, MDOT’s letter in opposition charged that the legislation “would delay and threaten to halt the Governor’s Traffic Relief Plan (TRP), which proposes to bring much needed congestion relief to the National Capital Region (NCR) by delivering added capacity along the I-495 and I-270 corridors at no net cost to the state.”
The letter appears to suggest the environmental impact statement requirements in the bill could still delay the 495/270 project — a point Kane echoed in his testimony. It prompted a sharp exchange between Kane and a committee member, Del. Sara Love (D-Bethesda).
“This [bill] will not affect the current designation of [the 495/270] project,” Love declared.
“Correct?” she asked Kane.
“Incorrect,” Kane responded.
“No, not incorrect!” Love shot back.
During the portion of the hearing on his bill to force a Board of Public Works vote on P3 toll rates, Barve said, “It’s not my intention to limit it to 10 cents a mile,” while saying that elected officials should be accountable for higher rates.
“I’m one of those guys who voted to raise gas taxes [in 2013],” Barve said. “Then, after I did that, I had to face the voters and I was held accountable for that.”
Turning to Kane, he asked, “I just wonder why you feel it is an unreasonable thing for the governor and the comptroller to have to have the same type of accountability that I had when I voted to raise the gas tax?”
Reiterating a point made in MDOT’s letter opposing Barve’s bill, Kane said that rate-setting for toll roads and bridges was best left to the Maryland Transportation Authority, whose members are gubernatorial appointees and which “has the expertise to do so.” He argued that giving the Board of Public Works power to limit tolls to 10 cents, even if not exercised, would scare off investors in P3 projects.
“The one primary requirement that investors look at when pricing risk into their equation is certainty,” Kane said. “Even the possibility that the Board of Public Works could theoretically override the 10 cent limit per mile doesn’t help, as it’s not something investors can count on.”
During the hearing on his so-called “promises” legislation — cosponsored by all of his colleagues in the 24-member Montgomery County House delegation — Korman declared: “This does not stop the project. This does not slow the project. It literally just puts in statute the way the secretary of transportation has said we are going to do the project.”
Korman said his bill was necessitated by the experience with plans to build a new Harry Nice Bridge in southern Maryland. He complained that Hogan and Rahn promised the bridge would include a separated pedestrian and bike lane, only to have the design for the new structure approved without that feature.
“So it’s great that they made these promises,” Korman said, referring to assurances Hogan and now-Transportation Secretary Greg Slater made to win Franchot’s support for revisions to the 495/270 project at the January session of the Board of Public Works. These included several provisions relating to funding of and access for mass transit. “We now need to make sure they actually live by the promises they have made.”
Kane sought to downplay the issue, while taking a swipe at Montgomery County Executive Marc Elrich — a Democrat who has tangled with Hogan over the 495/270 P3 project.
“I want to comment about comments that people lied, promises not kept. I get that,” Kane said, adding, “Nobody’s really talking much about the Capital Crescent Trail and the $50 million commitment that was made to build a biker/pedestrian path [under Wisconsin Avenue] that was removed by the county executive.
“You have aspirational goals when you start these large projects. … Oftentimes, adjustments have to be made.”
