Final arguments on Proposal 6

Proposal 6 is a constitutional amendment to require a public vote before the state of Michigan could participate in an international bridge or tunnel project. The proposal is aimed at the Next International Trade Crossing, a bridge between Detroit and Windsor that will compete with Manuel Moroun’s Ambassador Bridge for freight and passenger traffic. For full Bridge coverage of Proposal 6 -- and the other statewide ballot proposals this year -- visit our Ballot Mania page. Advocates were asked to make their case on how to vote on Proposal 6:

No: Prop 6 is roadblock to prosperity  By Lt. Gov. Brian Calley Michigan is driving toward a more prosperous future. Unfortunately, one special interest group is attempting to throw up a roadblock called Proposal 6. Proposal 6 seeks to derail the New International Trade Crossing, a proposed bridge between Detroit and Windsor that is vital to enhancing the $70 billion-a-year trade relationship between Michigan and Canada. Michigan must be able to compete on the global economic stage. Modern, reliable infrastructure that allows us to access foreign markets is essential if we are to reap the unlimited benefits of exporting our abundant agricultural and manufactured products. That’s why the NITC is supported by a broad coalition ranging from organized labor to manufacturers, including the Big Three auto companies. More than 200,000 jobs in our state are tied to Michigan-Canada trade. Unfortunately, Proposal 6 is designed to protect one special interest rather than Michigan’s interest. It preserves the lucrative monopoly enjoyed by the Ambassador Bridge owners, who are funding the proposal and spending millions on deceptive advertising to stall Michigan’s progress. The facts are these: • There is no cost to Michigan taxpayers for the NITC, which will be designed, built and operated by the private sector. Canada has graciously agreed to foot the bill and will be repaid by tolls on the Canadian side of the border. The reason for such generosity? Canada understands the need to encourage trade and protect our mutual economic security. In fact, Canada considers the NITC to be that nation’s most critical infra-tructure project. It is taking on these additional financial obligations because it understands that Michigan is still rebounding rom the economic challenges of the past decade. The legally binding agreement between our state and Canadian partners makes this crystal clear – Michigan taxpayers will not pay for this project. Period. • The NITC won’t put anyone out of business. Michigan needs its existing crossings as well as  the NITC. In fact, the Ambassador Bridge owners can join other qualified vendors in bidding on the project. • The project will generate a demand for more than 11,000 jobs during its construction, ccording to a Center for Automotive Research analysis. Nearly 1,400 permanent jobs will be  created for the bridge’s operation.  • The existing Ambassador Bridge is more than 80 years old and wasn’t designed to accommodate the volume of traffic it has today. About 99 percent of commercial traffic is forced to use this crossing. And, because the Ambassador Bridge empties thousands of trucks  each day into downtown Windsor, this crossing is the worst traffic bottleneck in the entire Pan-  American Freeway system. In contrast, the new NITC will provide a direct freeway-to-freeway  connection between Michigan and Canada, allowing traffic to bypass residential areas.  • Michigan can leverage Canada’s $550 million contribution to the project as matching funds for U.S. federal aid on Michigan highway projects. That’s great news for motorists in every corner of our state. • Only U.S. and Canadian steel will be used.  • Having only one Detroit-Windsor bridge jeopardizes our economic security. In December 2010 we saw how fragile the current system is, when a snowstorm halted trade across Port  Huron’s Blue Water Bridge. It rerouted trucks, causing extreme delays in reaching the Ambassador Bridge. The event resulted in significant production losses among auto  companies. The NITC provides a critical “safety valve” to alleviate similar situations.  • Proposal 6 is poorly worded, defining an international bridge as “any” bridge put into use after Jan. 1 of this year. Imagine the financial and public policy consequences of asking Adrian voters to approve a bridge project in Houghton.  The only people who win under Proposal 6 are the ones who are bankrolling it.

Yes: Prop 6
protects us
against risk

By Pat O’Keefe/O’Keefe & Associates

Gov. Rick Snyder presents the proposed New International Trade Crossing as an integral part of a strategy to transform Michigan into an international hub for logistics and distribution.

As a business owner who specializes in helping others make sound financial decisions, I share the desire to make Michigan a better place to do business. Unfortunately, my extensive review of documents, studies and raw data related to the NITC has led me to conclude the project would be bad for Michigan.

Peeling back the layers of this multi-billion- dollar project reveals overwhelming uncertainty and a startling lack of analysis that calls into question claims of a “free” bridge.

First, there is no demonstrated need for a new public bridge to Canada. The studies supporting the NITC make unreasonably optimistic assumptions about future traffic volumes, ignore correlating economic trends and directly contradict actual crossing data over the past 10 years.

Traffic forecasts are prepared by firms like the Corradino Group and Wilbur Smith Associates; these firms also have millions of dollars in engineering contracts from Michigan on the very projects they were asked to forecast traffic. Is it any wonder these forecasts show the new bridge is needed?

I cannot imagine a private-sector CEO making a $2.1 billion investment without incorporating the most recent data into forecasts, vetting the financing structure to withstand likely revenue and cost variations, and fully considering less expensive and more predictable alternatives.

Second, while the state has spent more than $40 million to study the NITC, it has not published any financial forecast demonstrating its economic feasibility. Why not? My analysis leads me to conclude the NITC is not economically viable.

Due to the NITC’s high costs and the absence of foreseeable traffic to generate revenue, Canada will not recover its spending on the bridge for at least 50 years, if ever. Michigan will not see NITC profits for a similar period due to its debt owed to Canada from the initial $550 million “loan.”  Without revenues, how will Michigan fund road maintenance and future improvements to the NITC?

In addition, the government will lose an estimated $747 million from lost toll and tax revenue from the Blue Water Bridge, Detroit-Windsor Tunnel and Ambassador Bridge, with Michigan’s direct loss being approximately $325 million. Michigan’s recent and planned investments in these existing crossings is more than $700 million. Why has no comprehensive analysis been conducted on optimizing use of the existing crossings or taking into account the reduction in truck traffic if the proposed $400 million Detroit-Windsor rail tunnel is built?

Finally, there is a strong possibility the NITC will cost more than estimated.  A recent study of large infrastructure projects revealed a 61 percent average cost overrun on such projects. The operative agreement regarding the NITC does not address who will cover Michigan’s cost overruns. And Snyder this week now admitted that he does not have Canada’s promise in a legal document, significantly increasing Michigan’s exposure beyond the $550 million loan Canada has softly agreed to contribute. If Michigan foots the bill, it will directly impact Michigan taxpayers. If Canada covers these costs, it will further delay – or eliminate – Michigan’s ability to ever participate in NITC toll revenues.

Until the full cost of the project is properly vetted, taxpayers will have potential risks and costs associated with the NITC. Snyder owes the public more information than he has supplied.

A “yes” on Proposal 6 will help force the governor to provide the public with more transparency and analysis on the above mentioned issues that raise serious concerns regarding the logic for and viability of building a new bridge.

Editor’s note: The study O’Keefe conducted of the bridge project was paid for by the Detroit International Bridge Co., which owns the Ambassador Bridge.