Over the course of The People Should Decide campaign, we’ve spoken to thousands of Michiganders about the New International Trade Crossing and the ramifications it would have for the state and its citizens, both those living today and future generations. It has been heartening to see more and more taxpayers come to see through the folly of the governor’s arguments for the bridge and to understand why it’s so important for the people to have a say on an issue with such magnitude and far-reaching consequences.

As we’ve discussed at length, there is simply too much on the line for the state of Michigan, already struggling to rediscover the successes of decades past, to risk it all on wild assumptions of future Michigan-Canada traffic growth and ludicrous assertions that such a massive project will somehow be “free.” As Michigan citizens, we know better, and Proposal 6 is our opportunity to demonstrate the pragmatism and common sense that defines who we are.

As you cast your vote today, remember that your choice on Proposal 6 is a gesture that goes far beyond the question of whether the government will build another bridge between Detroit and Windsor. Rather, voting YES on 6 sends a message to Rick Snyder and leaders everywhere that the power lies with the people, not with elected officials who would seek to impose their will over the citizens and legislators who recognize the danger in shaky financial schemes and empty promises.

We thank you for your continued support as we work toward a prosperous Michigan with a brighter future for all its citizens.

On Wednesday, the Financial Times ran a piece on the various proposals on the ballot in Michigan this November. The story includes a quote from Governor Rick Snyder in which he characterizes the ballot proposals as, “cases … of special interests trying to go around the legislature.”

In terms of Proposal 6, it’s hard to think of anything that could be more hypocritical from the governor.

The People Should Decide has been working to pass this proposal only because the governor himself circumvented the Michigan state legislature to sign an agreement with Canada for the construction of the New International Trade Crossing (NITC) between Detroit and Windsor.

Because of serious concerns about the financial viability of the NITC, the Michigan legislature passed multiple laws, which the governor signed, that prohibited the state from moving forward with the project without the legislature’s approval.

But, in a flagrant violation of the law, the governor signed his agreement with Canada unilaterally, skirting the people’s elected representatives and ignoring their voice in state government.

For the governor to criticize any of the ballot proposals for “going around the legislature” is, frankly, laughable.

The NITC, as currently planned, has the potential to be financially disastrous for the state of Michigan. The legislature had the wherewithal and foresight to recognize this, but sadly, the governor did not.

That’s why voting YES on Proposal 6 this Tuesday is so important. Before we indebt ourselves to a foreign power for decades, we must let the people have a say.

Proposal 6 is a statewide ballot initiative seeking to give the people of Michigan a voice in the debate over a new government-funded bridge, estimated to cost $3.5 billion. A yes vote on Proposal 6 means a bridge to Canada cannot be built unless the people approve it.

Mickey Blashfield, director of The People Should Decide Ballot Committee advocating for Proposal 6, explained the purpose of the rally: “Snyder and his team have been campaigning tirelessly to sell Michigan voters a fatally flawed plan to build a multi-billion dollar government bridge to Canada we don’t need and can’t afford. Now, they’ve taken days off from doing the people’s business to campaign against the people’s right to vote. The people have had enough – they want a say. And that’s why they’re voting yes on 6 on Tuesday.”

“We’re tired of the Governor taking the power away from the people and the Legislature, and that’s why we’re standing up to Governor Snyder and voting yes on Proposal 6,” said Minister Malik Shabazz, Chairman of the New Marcus Garvey Movement, who attended the rally. “It’s time the Governor understands he cannot give away our jobs to a foreign country and expect the people will let him take away their right to vote.”

Dennis Moore, Willow Run Tea Party Founder and Director, added  “Voting ‘Yes on Proposal 6′ should be a priority for every fiscal conservative. The lack of transparency and oversight on the governor’s multi-billion dollar bridge project has been rejected by the legislature multiple times. Ceding our sovereignty to Canada doesn’t remove the fiscal risk to Michigan taxpayers. Since Proposal 6 requires a vote of the people, it is the best insurance policy Michigan voters have on the ballot.”

Other groups which have expressed support for Proposal 6, include:

• The Fannie Lou Hamer Political Action Committee (affiliated with Detroit’s NAACP)
• The International Brotherhood of Teamsters Local 299
• The National Taxpayers Union; Americans for Tax Reform
• The Mexican Patriotic Committee of Detroit
• MANA de Metro Detroit
• Latin Americans for Social and Economic Development
• Ecumenical Ministers Alliance (EMA) Detroit
• Americans for Prosperity
• The Willow Run Tea Party
• The Detroit Association of Black Organizations
• The BLAAC Slate Oakland County
• The Marcus Garvey Slate
• The East Side Slate; and the East Side Community Slate

]]> http://thepeopleshoulddecide.com/michigan-groups-rally-in-support-of-proposal-6/feed/ 0 http://thepeopleshoulddecide.com/steve-lafleur-theres-no-such-thing-as-a-free-bridge/ http://thepeopleshoulddecide.com/steve-lafleur-theres-no-such-thing-as-a-free-bridge/#comments Wed, 31 Oct 2012 13:42:15 +0000 admin http://thepeopleshoulddecide.com/?p=1177 A letter from Frontier Centre analyst Steve Lafleur in today’s National Post reaffirms why Michiganders should be deeply troubled by the governor’s admission that there is no written agreement which obligates Canada to pay for cost overruns associated with the NITC.

Lafleur writes:

In a world of finite resources, governments need to weigh the tradeoffs of spending decisions carefully. Given the myriad of infrastructure projects that could be funded with $4 billion, the NITC is not the best use of funds. Expanding capacity at the Windsor-Detroit crossing would be as valuable to Maroun and the State of Michigan as it would be to Canada. If another bridge is needed, the other parties ought to pay their share.

Citing the economic analysis done by Michigan-based O’Keefe and Associates, Lafleur says:

While the bridge is being advertised as self-financing and risk free to Canadians, and outright free to Michiganders, it isn’t. A Michigan consulting firm recently released a report estimating the financial risks of the project. (The study was funded by Maroun’s company; but it is based on publicly available data). The report found that using assumptions contained in the most recent traffic study commissioned by the Michigan Department of Transportation, revenue from the NITC will fall short by $360-million. Assuming a 10% construction cost overrun — cost overruns occur in nine out of 10 bridge projects — that would increase to $3.1-billion. If traffic is 20% lower than projected, the shortfall would be $5.8-billion. If both happen, it would be $8.6-billion.

 Moreover, Michigan stands to lose tax revenue as drivers shift from Moroun’s bridge (which is taxed by the state) to the NITC (where all the revenue will be collected by the Canadian government). The report found that this could amount to $473.5-million, in addition to $273-million in losses at the Blue Water Bridge (linking Port Huron, Mich. to Sarnia, Ont.) and Detroit-Windsor Tunnel. This is by no means “free” to either party.

It’s clear that concern about the economic feasibility of the NITC is also rising on the Canadian side of the border. And that’s an important red flag for Michigan taxpayers, given that the Crossing Agreement signed by Governor Snyder allows Canada to amend or terminate the agreement at any time. If Canadian taxpayers get tired of covering Michigan’s share of construction costs – especially if the NITC goes over budget, as large infrastructure projects often do – who will pay? The burden would likely fall on Michigan taxpayers.

Fortunately, voting YES on Proposal 6 gives the people the power to decide before we commit ourselves to such a risky and expensive endeavor.

Last week, Crain’s Detroit Business published an interview with Governor Snyder, in which the governor admitted there was no written agreement to guarantee Canada will pay for cost overruns associated with the new government bridge. And yet, the media continues to take Gov. Snyder and Canadian politicians at their word, refusing to ask the hard questions that need to be asked about how the NITC proposal puts Michigan taxpayers at risk.

This week’s issue of Crain’s features a letter from Pat O’Keefe, founder and CEO of the Michigan-based financial consulting firm O’Keefe and Associates, responding to the lopsided coverage of Proposal Six and the governor’s NITC proposal.

To view O’Keefe’s full report on the NITC, click here.

——

From Crain’s Detroit Business (10/28/12): Do analysis on Prop 6

Editor:

The lack of in-depth analysis done by the media regarding the proposed new bridge is disturbing. We are shocked that the governor tries to pass it off as a “free bridge” when he hasn’t performed the analysis to determine that Canada’s unapproved commitment of $550 million to cover the Michigan portion is woefully inadequate. Will Canada really pay? If so, why isn’t the commitment in writing? The governor now admits Canada’s promise doesn’t exist in a legal document — a fact we have been stating for over a month.

My firm recently published a report that is available on our website analyzing the economics of the bridge. Our analysis used the state’s own numbers and showed the bridge is not needed at this time and is economically not feasible. It should be alarming that no responsible public official or media outlet has taken notice or started asking hard questions of the state.

Trucks will not suddenly mushroom from the ground with a new bridge. Truck traffic is down for many reasons, including the ongoing recession and the strengthening of the Canadian dollar. High-speed and double-stacked container rail capacity is being proposed for the crossing, which, in Gov. Snyder’s own words, will take trucks off the road. This has not been considered by the state’s “independent” international toll revenue forecasters, who receive millions in engineering contracts from MDOT. These forecasts are inaccurate.

Why hasn’t our governor forced the Canadians to sufficiently staff customs and immigration, grant the necessary permits for the proposed Ambassador Bridge twin span, and connect the Highway 401 extension to the existing crossing there?

Where is the outrage that a governmental unit can effectively put a private Michigan business, which employs Michigan workers, out of business by favoring a government-run competitor? There are so many questions left to be answered by our governor.

Crain’s report on Proposal 6 may have passed the weight test; unfortunately, it did not ask many of the hard questions regarding the underlying lack of detail or feasibility of the new bridge.

Patrick O’Keefe
CEO and founder
O’Keefe & Associates Consulting LLC

Not surprisingly, Governor Snyder makes some dubious statements regarding the NITC, but fortunately, Rep. Opsommer is there to correct him.

Claim 1: “We need both bridges” (the NITC and the Ambassador Bridge).

Opsommer’s rebuttal: “Executives from the Detroit Windsor Tunnel and the Detroit Windsor Rail Tunnel testified that traffic increases between the two cities will not exceed 1.5 percent in the foreseeable future. This figure is consistent with economic forecasts related to the crossing needs given in both the Michigan House and Senate.”

Why he’s right: The idea that there is enough traffic moving through the Detroit-Windsor trade corridor to support both crossings is simply not reality. Traffic has dropped steadily in the region for the last decade, and there is no reason to believe the government’s inflated traffic projections will actually come to pass.

Claim 2: “The NITC will not cost Michigan taxpayers.”

Opsommer’s rebuttal: “In agreeing to indebt the people of Michigan to a foreign power without legislative approval, Gov. Snyder has taken a tremendous gamble on the future fiscal health of our state.”

Why he’s right: There is no investment-grade study that shows traffic will be adequate to generate the revenue necessary to pay back Michigan’s $550 million loan from Canada. In addition, the state has already spent $41 million studying the project, a new customs plaza will cost taxpayers $263 million, and the state will lose millions in tax and toll revenue from existing crossings from which the NITC will steal traffic.

Opsommer also notes, “the ‘public private partnership’ industry admits that projects of this scope and magnitude have large cost overruns and typically over estimate potential future revenue by as much as 50 percent.” As there’s no written commitment from Canada to fund any cost overruns for the project, Michigan taxpayers are clearly at risk.

With no solid answers to the pressing questions on the NITC, Rep. Opsommer believes the taxpayers should have an opportunity to weigh in, saying, “Proposal 6 does not stop the construction of the bridge, it simply gives us a say. The governor may believe he can ignore the will of the people’s elected officials, but he cannot ignore the people when they voice their will directly.”

We couldn’t agree more.

In an interview published in today’s Crain’s Detroit Business, Governor Snyder confirms what we’ve warned against from the very beginning: Canada’s pledge to cover cost overruns on the New International Trade Crossing (NITC) is nowhere to be found in the agreement.

Unfortunately, the likelihood of such cost overruns is all too real — a U.S. Department of Transportation study found that overruns on projects of this type average 61%.

And while the governor says he “expects such an agreement to be hammered out at some point later in the process,” there’s no way to know if Canada will still be so keen on shouldering such an enormous financial burden in years to come — particularly when Canada has the power to amend or terminate the Crossing Agreement at any time. (Don’t take our word for it — read pages 36, 37 and 40 for yourself.)

Michigan taxpayers are smart enough to see the NITC proposal for what it is: a massive financial gamble based on poor research and slipshod rhetoric.

Don’t let the governor play games with your tax dollars or our state’s financial future. This November, vote YES on 6.

“Benefits” of the NITC

Claim: The new bridge will reduce delays due to congestion.

Reality: Any delays along the U.S.-Canada border at Detroit-Windsor are due to a lack of staffing of customs booths, not a lack of capacity. Building the NITC would actually exacerbate the customs staffing problem, as the Canadian Border Services Agency has cut numerous front-line positions, and would now be tasked with staffing another international crossing in the Detroit area.

Claim: The NITC would create 10,000 construction jobs in Michigan.

Reality: As we’ve pointed out before, the 10,000 number represents total person-year jobs, not total jobs created each year. In addition, these jobs are temporary, and they are not only Michigan-based jobs, but include positions in surrounding states.

The “Heartland” Trade Corridor

Claim: According to the Public Border Operators Association (PBOA), truck traffic is projected to increase 128% over the next 30 years.

Reality: This projection is misattributed, as the PBOA doesn’t make traffic predictions — the number actually comes from a 2005 study by the IBI Group. But as we learned from a new analysis by O’Keefe & Associates, using this number is highly irresponsible, because it doesn’t account for the 2008 financial crisis or the recession. Actual border-crossing data between 2004 and 2011 directly contradict the projections from the 2005 IBI Group report.

Financing for the NITC

 Claim: After enough toll revenues have been collected to repay Canada’s $550 million loan to Michigan and approximately $1 billion to a private firm that will build, operate, and maintain the bridge for a concession period, Michigan will receive $50 million per year for the remaining 80 years of the bridge’s life. This is expected to occur in 45 years.

Reality: This plan is based on the government’s highly optimistic traffic projections, which the O’Keefe analysis shows are notoriously unreliable. In fact, the O’Keefe analysis demonstrates that it is very uncertain whether Michigan will ever share in profits, because between traffic shortfalls and cost overruns that are common for this sort of project, Canada’s unreturned investment could balloon up to $8.6 billion. When Canada tires of footing the bill for the project on its own, it could easily amend or terminate the Crossing Agreement, leaving Michigan taxpayers stuck with the bill.

Next Steps

Claim: Buy America policy, which mandates the use of only U.S.-produced iron and steel on any projects that count toward a state contribution to receive federal highway matching funds, doesn’t apply to the NITC.

Reality: Buy America requirements certainly do apply to this project, as seen by the fact that Governor Snyder applied for a waiver from the requirements, which he has yet to receive. In addition, Canada’s fact sheet is dated July 2012, before the comment period on the requested waiver even closed.

The bottom line: The case for the NITC doesn’t hold water. Before Michigan gets locked into a boondoggle project for a bridge it doesn’t need, the people must have a say. This November, vote YES on Proposal 6.

The article features important commentary from University of Michigan law professor Dan Crane, who notes that although Canada has offered to cover the costs of the bridge today, “political winds have a tendency to change. ‘Ten years from now we could be in a situation where there are demands that Michigan step up and contribute money,’ Crane said.”

In fact, it would be easy for Canada to renege on its promise, as the Crossing Agreement contains termination and amendment clauses on pages 36 and 40. And thanks to a new analysis from O’Keefe & Associates, we also know that between cost overruns that are common for this sort of project and traffic shortfalls below the government’s overly optimistic projections, the cost of the NITC could skyrocket to more than $8 billion.

Just how long will Canada be willing to pour billions into its NITC investment without seeing any return? That’s anyone’s guess, but we know the Canadians are sure to ask Michigan taxpayers to foot the bill once they realize the folly of the situation into which their leaders have gotten them.

Before we indebt ourselves to a foreign power, let’s make sure the people have a say — by voting YES on Proposal 6.

Name: Raphael Starks
City: Detroit, MI

Raphael is a lifelong Michigan resident, a husband, and a father. It boggles his mind that anyone could believe the governor when he says that a huge new infrastructure project like the NITC will be “free.” It also upsets him that the people aren’t being given a say in a matter with this much importance and implications for people around the state. Raphael is voting YES on Proposal 6, because he believes in his right as a citizen to have input into how the government makes decisions that will affect him, and he’s worried this right is being taken from his by a governor that doesn’t care about what the taxpayers think.
“[The bridge] may end up being free during their term of office, but eventually, we the people are gonna end up paying big for it. … I’d like to see the tax dollars go to the infrastructure, such as our roads, and also … to increase our first responders.”

“I’m voting YES because we have a say-so; let our voices be heard. Please, people, speak up. … Use your constitutional right to vote. Do what’s right.”

To hear more of your voices, click here.