By Jeff T. Wattrick | MLive.com
When Governor Rick Snyder delivered his first State of the State address in January, he surprised almost everyone by announcing his support for the proposed new bridge between Detroit and Windsor.
As his administration has lobbied to win legislative approval for the project, Lt. Gov. Brian Calley emerged NITC’s top public advocate within the administration.
Last week, in advance of the state legislature’s fall session, MLive sat down with with Lt. Gov. Calley to discuss the NITC’s prospects in Lansing.
Jeff Wattrick: Let’s start with the big question. Why is the NITC important to Michigan?
Brian Calley: We have an economy that’s still very much based on the success of exporting things made in Michigan to the rest of the world. Our most important customer is Canada. Over half of our exports are sold in Canada. Just simply getting our goods to market is critically important to the future of this state, and jobs in this state.
That’s what it’s all about — jobs. Whether you talk about the direct jobs with the project itself — that’s very important — but more important is the long-term benefit to the economy, of lifting a restriction on job growth at our current exporting companies. They really have to look toward other places that have better, easier access to the markets than the atrocious bottleneck that they have to deal with today.
JW: You call [the Ambassador Bridge] a bottleneck. I found a comment from former state Senator Alan Crospey. Last year he called the Ambassador Bridge the most efficiently run border crossing in the country. Do you take issue with that assertion?
BC: What we’re looking at is the entire border system, from where you go from Michigan’s freeway system to when you hit the 401 in Canada, all the things that happen between those two points are things we have to find a solution for. It’s a terrible bottleneck.
Now, you could look at any particular place and say: “You know what? They’re able to handle toll transactions very efficiently.” Someone makes it into the toll plaza, they pay their toll and they make it through—I’m sure they do that very efficiently. But the efficiency under which they manage the collection of tolls is a very small piece of the overall picture.
Sen. Crospey, I think, was talking about the operations part they handle, that they do a good job. I have no reason to believe they don’t do a good job at that. But the fact that you have seven miles, and 18 traffic signals, and a road they’re trying to retrofit for 8000 commercial trucks per day to make it through a plaza area that was never designed for post-9/11 inspections—secondary inspections off site, a couple miles away—all these different factors make it an awful bottleneck for our exporting companies to deal with.
So whether you’re talking about agriculture—30% of everything grown in Michigan is sold in Canada—or manufacturing in the state of Michigan, we have awesome opportunities in front of us for growth of jobs in the industries that are already here. But there is a restriction on growth because of access to the most important market we have.
JW: What’s the process to get the NITC bill from where it is today to the Governor’s desk for signature?
BC: Essentially we need to make the case across the political spectrum, Republicans and Democrats. This is a good opportunity for a bi-partisan effort to move it through. I think it is going to take a lot of personal communication with respect to what the bill actually says.
I still hear comments from people saying: “I still don’t know what to believe, will this cost Michigan?”
All you really have to do is read the bill and you’ll see that it is crystal clear. It is impossible that the failure of a bridge, done in the way we are proposing it, could come back and create a liability for the state of Michigan. It’s not even something that’s—it’s not even tricky to do—the separation of financial responsibility for the success of this bridge that will be built, financed and managed by a private concessionaire.
JW: To that end, it seems like building this bridge is consensus good policy everywhere but Lansing, where it is contentious. Why is it contentious in Lansing when it’s not contentious in Canada, it’s not contentious in the business community, it’s not contentious in Columbus, Ohio. What’s going on here?
BC: Yeah, it’s difficult to put your thumb on exactly how one entity has been able to gain such a stranglehold on the political system. I will say they’ve had a lot of practice at it over the years, and have substantial financial resources to put into the political system. Kwame Kilpatrick’s largest donor ever was the Morouns. The same could be said about Republican politics as well; money does impact the process, or at least buys access.
It’s something we really do have to work through, to get past the fact that they can write bigger checks than most. At the same time, the ability to write checks or run an ad campaign cannot trump what is good policy and necessary to create jobs in this state.
This isn’t about government creating jobs. This is about the government creating an atmosphere under which private industry can make jobs. One of those things is access to the market that buys more of our stuff than anyone else—more than any other state, and more than any other country. Canada is, by far, our most important market and we have to give access to our exporting companies or else we have to give up on the growth of manufacturing in this state.
JW: At this point, how confident are you that this bill will get through the legislature?
BC: I’m confident the bridge will get built. I don’t know exactly what form it will happen in as it goes through the legislative process. We know there will be input and changes. We saw in a lot of our proposals over the course of the first six months that, as they went through the legislative process, that they came up with great ideas and improvements that we didn’t think of before.
We’re very open to the legislature having some input or the ability to make improvements that we didn’t include in the first place. I’m very confident it will happen. I just don’t know what form it will happen in yet.
JW: When you say you’re confident the bridge will get built, there is an implication there that if the legislature doesn’t approve this bill, there’s another path to get this built.
BC: Well, I’ve identified—if you consider legislation one way—seven additional ways that the bridge could be authorized and completed. There’s actually many different ways it could happen. We’re still committed to the legislation because we think it’s the best way. So we’re focusing all of our effort and attention on the passage of this proposal. It’s a complete solution that has a lot of other benefits attached to it as well, such as the federal draw down of resources to fix roads and bridges all across the state.
So we’re very much committed to our proposal, still thinking it’s best, but at the end of the day, there is so much demand for an end-to-end border solution that I’m confident that if the legislature doesn’t act, there would be some other method that it would be authorized under.
JW: What are some of those methods?
BC: Well, because we’re still very committed to our proposal, I’m not in a position where I’m going to be willing to go through—some of the others are out there and people know what they are—we’re still only talking about our proposal because we don’t want to give anyone the impression that we’re giving up on our proposal. There’s actually been substantial progress made over the summer.
AP PhotoMichigan Gov. Rick Snyder delivers his first State of the State address in Lansing, Mich., Wednesday, Jan. 19, 2011. He used the speech to announce his support for a new Detroit-Windsor border crossing.
JW: When the Governor announced his support for this at the State of the State, he talked about a bill that would be very different from the previous bill in 2010. What are some of the high level differences between that proposal and this one?
BC: What we’ve done is established an authority. It’s kind of the same method that we’re used to dealing with at the Mackinac Bridge. What would happen is that authority would be put in place to join up with the Canadians to create a concessionaire agreement—like a bid document sent out to the private sector.
Included in the bill that creates the authority are several important and absolute restrictions that do not allow the authority to obligate the state of Michigan in anyway, shape, or form. There are several provisions in the bill—we went way overboard in stipulating all the different ways, or saying over and over and over again in the bill—putting restrictions on the authority saying Michigan cannot and will not be obligated. We went so far as to say there are no moral obligations to support the bridge that the private sector will build under our proposal. That’s something that’s a departure from the past.
I think in the past there was a presumption that the bridge would support itself, but if it didn’t then maybe the state of Michigan would kick in some money to help. That is an absolute departure from the past. We’re not willing to obligate Michigan. We believe the private sector will be willing to take on the risk, put up the money to build the bridge, and run it without Michigan guaranteeing anything.
The other difference is the connection. By the end of the previous administration, the Canadians had stepped forward to put up money to connect I-75 to the bridge. As a state representative, while this was always an interesting project to me, this was always one issue that had to be solved before I would support it.
I didn’t support it before because, yeah you had the private sectors building the bridge but it was still going to cost us money to hook up to the bridge. Now the Canadians are putting up the money to hook our road system to the bridge, so we don’t even have to do that.
On top of that we have federal government willing to consider the Canadian money spent on an I-75 interchange and plaza as Michigan money spent on an I-75 interchange and plaza, meaning that it would solve a big problem we have in the future, which is not being able to draw down our federal dollars. We will be about $125 million short in our [federal transportation] match money next year, based on what we think we’ll be able to collect in gas tax revenues.
JW: What was the process for working out that arrangement with the federal government? It seems from the outside a little strange that you had a Democratic Governor pushing for this project who didn’t work out that arrangement with a Democratic administration. A Republican Governor comes in and within a month—right?—has that worked out. What was the process to make that happen?
BC: The first step is we asked. I don’t think that anyone ever asked before.
I think it’s an important insight into the way this Governor thinks, that you look at issues that might be problems or might be opportunities, but trying to maximize the impact of everything that happens. I can remember the conversation I had with the Governor, over the phone, when he asked: “Wouldn’t the I-75 interchange be a federally-qualified road project?”
Well, yeah, I don’t know why it can’t count. Why don’t we ask?
There was a trip he made to Washington and part of that was with the transportation department. He brought up the concept, and in a reasonably short period of time we had an answer back that we could do it.
I think it’s just the matter of having a problem-solving governor who doesn’t recognize the normal boundaries or barriers to getting things done and tried to make the most of every situation in front of us.
JW: Beyond the federal match, what are some of the other implications (pro or con) for the $550 Canadian—are you calling it a loan?
BC: No, and that’s another misconception, that it’s a loan. The Canadians are going to put money into the joint authority we create with them under this legislation. They’ll put money into that authority and that authority will then build out the Michigan side.
Think about it like you were going to invest in a company. You invest and maybe the company does well and maybe it doesn’t, but there is not obligation to pay it back outside of the success or failure of the entity itself. That’s the risk Canada is willing to take on. What would happen is they would wait in line behind the private concessionaire to get paid back from the tolls the bridge would generate.
I happen to think the Canadians are going to get paid back through the tolls for the money they put into the Michigan side infrastructure. Even if they don’t, that’s not our problem. This is an investment they’re making in a joint venture with the state of Michigan. The ability of the joint venture itself to pay back Canada is the only way they have to get paid back.
I will say, also, there is precedent for this. When the original Blue Water Bridge was built, the roles were exactly opposite. It was Michigan who paid for everything, and waited for the bridge tolls to pay it back. This is just another chapter of Michigan and Canada being the long-term good friends that they are.
In the past, when Michigan had the resources and there was a border issue, Michigan fronted the money and the tolls paid us back. That is a very profitable venture by the way, the Blue Water Bridge. It only handles 16% of the overall commercial traffic, and yet somehow cash flows.
Tomorrow, Lt. Gov. Calley discusses why Michigan needs Canada’s help to make this project happen, contrasts the Ambassador Bridge Gateway Project with the NITC plans and explores how transportation policy will continue to be a special focus of the Snyder Administration.