Toll Road Lease Doesn't Seem Too Bad
July 28, 2016 at 4:25 p.m.
Indiana Governor Mitch Daniels decided he wanted to lease the Indiana Toll Road for 75 years.
That's because the state is financially strapped and there's no way to fund a bunch of needed road projects.
(One of those, by the way, is Ind. 15 north from Warsaw to Leesburg.)
So Daniels wants to take the money from the lease - $3.8 billion or so - and get going on these road projects.
The road projects will generate jobs for Indiana workers and make the state more attractive to industrial development, the governor says.
Major projects include improvements to U.S. 31 between South Bend and Indianapolis, work on the Hoosier Heartland Corridor connecting Fort Wayne and Lafayette, and the I-69 extension from Indianapolis to Evansville.
Once Indiana has the check, the governor says, the projects can start right away.
Frankly, I don't see too many negatives here.
Opponents of the plan want to keep the toll road and take on more public debt. They say we should use profits from the toll road to pay off a $2 billion bond issue.
Looking at the little picture, I'm not a fan of a financially strapped state taking on another $2 billion in public debt.
Looking at the big picture, I am a big fan of privatization. Seems to me, anytime lawmakers can put something in the hands of a private company to run, they should go for it.
One of the big criticisms of Daniels' plan is that the private company - a foreign conglomerate from Spain and Australia - will make money.
To me, that's a good argument for leasing it to them.
They have to make a profit. That's a good thing. The contract limits the amount they can raise tolls. The contract sets out a level of maintenance and they still have to make a profit.
That means that they have to operate efficiently because they're a private company.
They don't have a bottomless pit of tax dollars to dip into if they're not efficient and profitable.
Sure, Indiana was making money off the toll road. But the private company will make more.
That's because they will not be encumbered by the trappings of the public domain.
It's like school construction. You can build a darn nice house for $90 a square foot.
Want to build a school? Figure $125 a square foot.
Anytime the government is involved in running something or building something, it costs more. It's just the way it is.
Some argue that we shouldn't be selling out to a foreign company. I don't think that argument has much merit in the world today.
Do you drive past that BP gas station when it's time to fill up because it's owned by British Petroleum?
How many people making that argument drive a Toyota, Nissan, Honda, VW, Mercedes, BMW or Volvo?
Heck, back in 1995 a British outfit took over management of Indianapolis International Airport.
That's right, BAA Indianapolis LLC is a subsidiary of BAA plc, the private company which owns and operates seven airports in the United Kingdom including Heathrow, Gatwick and Stansted airports serving London.
BAA Indianapolis LLC has full operating responsibility for the six airports owned by the Indianapolis Airport Authority. That makes Indianapolis International the largest privately managed airport in the United States. And it's managed by a foreign company.
BAA seems to have done a fair job of improving customer service and reducing airport operating costs.
But all arguments aside, and whether you like the toll road lease deal or not, one thing that is striking about the whole ordeal is the level of partisanship in the Indiana House.
All the Republicans were for it. All the Democrats were against it.
Honestly, can't anybody think for themselves anymore in politics? Is it all about following the party line?
Are you telling me not one Republican - not one - was opposed and not one Democrat - not one - was in favor?
That's just counterintuitive and intellectually challenged.
It will probably play out the same way in the Senate where Republicans outnumber Democrats 33-17.
I think it has a lot to do with what's going on in Washington.
Since the Iraq war became unpopular, I have witnessed some of the nastiest partisan politics ever in Washington.
I understand that politics breeds a certain level of contempt, but it's getting ridiculous.
Now it's trickling down to the Statehouse and politicians on both sides of the aisle are to blame.
It's too bad, really, and I don't see it getting better any time soon.
But let's put aside the legislative venom and the pro and con toll road arguments for a moment.
Let's boil it down to a single, selfish nugget.
Wouldn't it be nice to have an extra lane on Ind. 15 between here and Leesburg? [[In-content Ad]]
Indiana Governor Mitch Daniels decided he wanted to lease the Indiana Toll Road for 75 years.
That's because the state is financially strapped and there's no way to fund a bunch of needed road projects.
(One of those, by the way, is Ind. 15 north from Warsaw to Leesburg.)
So Daniels wants to take the money from the lease - $3.8 billion or so - and get going on these road projects.
The road projects will generate jobs for Indiana workers and make the state more attractive to industrial development, the governor says.
Major projects include improvements to U.S. 31 between South Bend and Indianapolis, work on the Hoosier Heartland Corridor connecting Fort Wayne and Lafayette, and the I-69 extension from Indianapolis to Evansville.
Once Indiana has the check, the governor says, the projects can start right away.
Frankly, I don't see too many negatives here.
Opponents of the plan want to keep the toll road and take on more public debt. They say we should use profits from the toll road to pay off a $2 billion bond issue.
Looking at the little picture, I'm not a fan of a financially strapped state taking on another $2 billion in public debt.
Looking at the big picture, I am a big fan of privatization. Seems to me, anytime lawmakers can put something in the hands of a private company to run, they should go for it.
One of the big criticisms of Daniels' plan is that the private company - a foreign conglomerate from Spain and Australia - will make money.
To me, that's a good argument for leasing it to them.
They have to make a profit. That's a good thing. The contract limits the amount they can raise tolls. The contract sets out a level of maintenance and they still have to make a profit.
That means that they have to operate efficiently because they're a private company.
They don't have a bottomless pit of tax dollars to dip into if they're not efficient and profitable.
Sure, Indiana was making money off the toll road. But the private company will make more.
That's because they will not be encumbered by the trappings of the public domain.
It's like school construction. You can build a darn nice house for $90 a square foot.
Want to build a school? Figure $125 a square foot.
Anytime the government is involved in running something or building something, it costs more. It's just the way it is.
Some argue that we shouldn't be selling out to a foreign company. I don't think that argument has much merit in the world today.
Do you drive past that BP gas station when it's time to fill up because it's owned by British Petroleum?
How many people making that argument drive a Toyota, Nissan, Honda, VW, Mercedes, BMW or Volvo?
Heck, back in 1995 a British outfit took over management of Indianapolis International Airport.
That's right, BAA Indianapolis LLC is a subsidiary of BAA plc, the private company which owns and operates seven airports in the United Kingdom including Heathrow, Gatwick and Stansted airports serving London.
BAA Indianapolis LLC has full operating responsibility for the six airports owned by the Indianapolis Airport Authority. That makes Indianapolis International the largest privately managed airport in the United States. And it's managed by a foreign company.
BAA seems to have done a fair job of improving customer service and reducing airport operating costs.
But all arguments aside, and whether you like the toll road lease deal or not, one thing that is striking about the whole ordeal is the level of partisanship in the Indiana House.
All the Republicans were for it. All the Democrats were against it.
Honestly, can't anybody think for themselves anymore in politics? Is it all about following the party line?
Are you telling me not one Republican - not one - was opposed and not one Democrat - not one - was in favor?
That's just counterintuitive and intellectually challenged.
It will probably play out the same way in the Senate where Republicans outnumber Democrats 33-17.
I think it has a lot to do with what's going on in Washington.
Since the Iraq war became unpopular, I have witnessed some of the nastiest partisan politics ever in Washington.
I understand that politics breeds a certain level of contempt, but it's getting ridiculous.
Now it's trickling down to the Statehouse and politicians on both sides of the aisle are to blame.
It's too bad, really, and I don't see it getting better any time soon.
But let's put aside the legislative venom and the pro and con toll road arguments for a moment.
Let's boil it down to a single, selfish nugget.
Wouldn't it be nice to have an extra lane on Ind. 15 between here and Leesburg? [[In-content Ad]]