Category: Your Voice Published on Wednesday, 31 October 2012 12:58 Written by Rep. Fred Durhal
Recently, Gov. Snyder has been pushing the proposed New International Trade Crossing (NITC) between Detroit and Windsor as a big win for Michigan. According to NITC proponents, the state will get a free bridge, financed entirely by the Canadian government, that will spur trade and economic growth and enhance Michigan’s standing as an international transportation and logistics hub.
However, the old adage, “if it sounds too good to be true, it probably isn’t true,” couldn’t be more applicable. As a member of the Michigan House Appropriations Committee, my job is to ensure the state spends its money wisely. As such, I have considered all sides of this issue in-depth and determined that the NITC project is profoundly problematic, with the potential to be financially disastrous for Michigan.
Embarking on a multibillion-dollar infrastructure project without a true sense of whether demand actually exists to support it is foolhardy. But, to date, there has been no comprehensive, investment-grade study that demonstrates that traffic levels on the NITC will be enough to pay back Michigan’s $550 million loan from Canada. Remember, traffic levels between Detroit and Windsor have dropped consistently through the last decade, and the state will be dependent on toll revenue from that traffic to repay the principal of the loan, plus interest that begins to compound from day one.
In addition, a new analysis demonstrates that between cost overruns that are very common for this type of project and traffic shortfalls, Canada’s unreturned investment on the NITC could balloon to more than $8 billion.
It’s important to understand that the Crossing Agreement isn’t “ironclad,” as the governor claims. In actuality, it can be amended or terminated at any time — see pages 36 and 40. If Canada gets cold feet about pouring massive sums into the bridge without recouping its investment, the bill will fall to someone, and it could very well be Michigan taxpayers.
With so much on the line, it is reckless to merely cross our fingers and blindly hope traffic will be adequate to make the bridge pay for itself.
The agreement is also troubling in that a Canadian-controlled Crossing Authority will oversee the financing and operation of the bridge, with the freedom to set toll levels and make unilateral determinations on what entities would get construction contracts — likely those from Canada, rather than the U.S.
And despite the governor’s assurances that the bridge will be “free,” the Michigan Department of Transportation has already spent more than $40 million simply studying the bridge project, while a new customs plaza would cost federal taxpayers (including Michiganders) $263 million. In addition, the NITC would draw traffic from existing publicly owned crossings in the Detroit region, including the Blue Water Bridge and the Detroit-Windsor Tunnel, costing the state millions, if not billions, in lost tax and toll revenue.
It is precisely these concerns that led the State Legislature to pass four bills expressly prohibiting the Strategic Fund or Michigan Department of Transportation from entering into any agreement to build the NITC without the Legislature’s approval. Astoundingly, the governor signed the Crossing Agreement with both entities appearing as parties, a flagrant violation of the law.
By skirting the State Legislature, the governor disenfranchised the elected representatives of the people of Michigan, and in effect, the people themselves. But taxpayers have an opportunity to reclaim their rights by voting YES on Proposal 6. Amending the constitution to ensure a statewide vote before the construction of any new international bridges or tunnels ensures the people have a say in how their tax dollars are put to use. And make no mistake, they have already been put to use on the NITC project.
On Nov. 6, I urge you to vote YES on Proposal 6 for a choice on the bridge.
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