Michigan Truth Squad calls another “Foul” on Moroun funded ballot effort

Originally posted by The Michigan Truth Squad

The People Should Decide – Website FAQ sheet

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This document continues a vigorous — and expensive — campaign to block construction of a bridge between Detroit and Windsor. As of now, the primary commercial crossing is the 83-year-old Ambassador Bridge. The campaign document is paid for by The People Should Decide, a group funded by interests connected with DIBC Holdings Inc., a company held by Ambassador Bridge owner Manuel Moroun.

Moroun wants to build his own second span connecting Detroit and Windsor. The People Should Decide has spent $4.6 million in 2012 alone opposing the bridge. It backs a November ballot proposal that would require popular approval for the state to build or own an international bridge. Gov. Rick Snyder has pushed for the crossing, saying it will be a boon to trade and job creation.

QUESTIONABLE STATEMENTS:

“The governor says the bridge will be free … But he admits that the new customs plaza could cost federal taxpayers more than $263 million – and that’s not even including staff and operating costs.”

After failing to persuade the Legislature to approve the project, Snyder in June announced agreement with Canada to build the bridge, with Canada promising to fund Michigan’s $550 million share of the project’s construction and land acquisition costs. The bridge, he said, would not cost Michigan taxpayers “one penny.”

The construction cost of the customs plaza is to be picked up by the U.S. General Service Administration, with ongoing costs of the plaza to be federally funded.

The agreement with Canada protects Michigan from direct costs in building the bridge. However, inasmuch as Michigan taxpayers contribute to federal spending, they would fund a share of plaza construction and ongoing operational costs.

According to Lt. Gov. Brian Calley, taxpayers paid $200 million rebuilding a plaza and interchange at the Ambassador Bridge, referring to the $230 million project to rebuild the plaza and improve connections to Interstates 96 and 75. Moroun was briefly jailed earlier this year for failing to comply with a court order to complete his company’s share of that project.

Questionable statement: “Another study estimated the Total Net Cash Flow Loss attributable to the U.S. and/or Michigan as a result of the project to total approximately $1.5 billion from 2016 through 2035.”

The figure is from Birmingham consultant Conway MacKenzie, hired by Moroun, which estimated that total net cash-flow losses for Michigan and/or the U.S. government would be $1.5 billion through 2035, while Canadians would face a shortfall of $3.2 billion, for total losses of $4.7 billion.

Snyder administration officials dispute the study.

Backers of the bridge portray it as a needed portal to future economic growth. The Ambassador Bridge is the busiest international border trade crossing in North America, with more than 7,000 trucks crossing each day. According to the Public Border Operators Association, 25 percent of goods traded between Canada and the United States cross over the Windsor-Detroit border.

A 2008 study by the Michigan Department of  Transportation projected that truck traffic would increase 128 percent over the next 30 years, surpassing current capacity by 2033.

A study by the Ontario Chamber of Commerce found that delays in the Detroit-Windsor corridor could cost United States and Canada $17.8 billion by 2030 and 70,000 lost jobs.

Questionable statement: “The governor says the bridge will be free … But his plan depends on a $550 million loan from Canada. The Crossing Agreement makes clear: So long as that loan remains unpaid, Michigan is prevented from collecting any share of the toll revenues generated from the bridge — and Canada will continue to collect interest. That could put Michigan in debt to Canada for decades to come.”

Under the agreement with Canada, Canada pays up to $550 million to cover Michigan’s share of the project’s cost. Canada is to recoup that cost with tolls collected on the Canadian side of the crossing. The tolls also will be used to pay the private bridge concessionaire and for maintenance. Canadian officials express confidence toll revenue will prove sufficient to pay for the project.

“The governor says the bridge will be free … But MDOT has already spent over $41 million in taxpayer money just to do a study of the bridge.”

MDOT officials peg the spending to date on planning at $42.9 million.

“The governor says the bridge will be free … But according to DRIC’s Environmental Impact Statement, the NITC would displace approximately 257 households; 43 businesses with 685 jobs — many held by minorities and low-income people; the St. Paul AME Church and Kovacs Bar, which are eligible for listing on the National Register of Historic Places; up to five places of worship (including St. Paul AME Church); and a community recreation center and playground.”

The agreement with Canada stipulates that the request for proposals to build the bridge must include a community benefits plan and involvement of affected communities. Under eminent domain law that governs taking of land for public purposes, property owners are compensated at fair market value.

“The governor says the bridge will be free … But plans fail to account for the fact that traffic between Detroit and Windsor has actually decreased 49.9% since 1999. This includes crossings on both the Ambassador Bridge and the Detroit-Windsor Tunnel through 2011. Indeed, the Governor’s own government studies show there’s no justification for a second bridge to Canada.”

Given that he considers the bridge proposal a money-loser, it’s curious that Moroun and his son, Matthew, want to build a second private bridge to Canada.

Commercial traffic declined during Michigan’s deep recession last decade, but rebounded as the major automakers recovered. Truck traffic grew from under 2.3 million in 2009 to more than 2.6 million in 2010 and 2011. Ford, General Motors, Chrysler and many other business interests are enthusiastic proponents of the bridge plan, saying a new span will cut shipping delays and spur growth.

“The governor says the bridge will be free … But MDOT reports assume that the new government bridge will draw a substantial amount of traffic from the other crossings (Ambassador Bridge, Detroit-Windsor Tunnel, Blue Water Bridge), thereby reducing tax revenues from tolls at those crossings.”

A presidential permit application by the state of Michigan projects a range of effects from the proposed bridge on revenues for the Ambassador Bridge and the Blue Water Bridge at Port Huron. Revenues for the Ambassador Bridge, pegged at $67.4 million in 2008, were projected to drop to $41 million in 2015 in one forecast model and rise to $84.1 million in another, with revenue projected at $66 million in 2035 in one model and $121.9 million in 2035 in another. Revenue for the Blue Water Bridge, pegged at $29.1 million in 2008, was projected to be at $41.1 million in 2015 in one model, $33.6 million in another, and at $66.7 million in 2035 in one model, $52.4 million in another. Under its low-revenue forecast for the Ambassador Bridge, net profit is projected at $18.9 million in 2015 and $7.2 million in 2035. Profits were projected at $61.9 million in 2015 and $63.1 million in 2035 in the other forecast model.

A 2011 report by the Anderson Economic Group noted a potential revenue drop to the Ambassador Bridge of nearly $70 million by 2030 if the new span is built.

“The governor says the bridge will create jobs … But the Crossing Agreement says that the International Authority will be selecting the winning proposal to build the bridge, meaning — since the Authority is made up of some Canadian and some Michigan bodies — Michigan companies and workers are not guaranteed the opportunity for construction jobs.”

A study by the Center for Automotive Research estimates that construction will create 6,000 jobs each of the first two years and 5,100 in each of the final two years. Michigan workers will be free to compete for those jobs. Moreover, the $550 million Canada is shouldering as Michigan’s share can be used by the state as matching funds to capture $2.2 billion in federal money that can be spent on roadway projects across the state. CAR estimates that will generate an additional 6,600 jobs annually for four years.

OVERALL IMPRESSION:

The document cherry-picks data to suit the ends of The People Should Decide, which are to block a span not owned by the Moroun family. If there is no need for a second span, why does their company want to build and own one?

The document correctly notes that Michigan taxpayers would pay a proportionate share of federal funds for construction and ongoing operations of the customs plaza. In light of that and planning costs, it is therefore a stretch to say that the project would not cost Michigan taxpayers “one penny.”

But the document fails to note such contributions to the Ambassador Bridge crossing in the form of customs plaza and interchange work. It also ignores evidence that the proposed span would be an economic boon to Michigan.

TRUTH SQUAD CALL: Foul. “Get The Facts” continues the trend of previous ads from Moroun circles. Facts are missing; distortions are used.