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July 18, 2006
Privatizing Turnpike=Higher Tolls
Columbus, Ohio –Following news last week that millionaire and Republican gubernatorial candidate Ken Blackwell is taking free rides on the same Ohio Turnpike he wants to privatize, the Associated Press reported over the weekend that such lease efforts usually involve selling off roadways to foreign companies who increase tolls.
“Expert analysis of other toll-road privatization schemes confirm what we’ve feared all along—leasing off our Turnpike will increase tolls, plain and simple,” said lieutenant governor candidate Lee Fisher. “Selling off one of our state’s most valuable assets that was built by Ohioans and has been run by Ohioans to a foreign company and tying our hands for the next 99 years is incredibly short-sighted. It’s just one more of Mr. Blackwell’s quick-fix, short-sighted political gimmicks.”
The AP reported that after Illinois sold a 99-year lease to the Chicago Skyway, the foreign operators raised tolls 50 cents to $2.50 and said that by 2017 tolls will reach $5.
In fact, Mr. Blackwell’s friends at the conservative think tank Reason Foundation told the AP that “private investors can raise more money than politicians to build new roads because these kind of owners are willing to raise tolls.”
Orange County provides a disturbing example of such misguided privatization schemes. Seven years after a partly French-owned toll-road was built and operated for $130 million, the county faced massive traffic congestion. But its hands were tied because of the lease, which included a provision forbidding the county from building other roads. According to the AP, Orange County was forced to buy back the lease for $207.5 million and a massive loss.
According to news sources across Ohio, when the Ohio Turnpike raised tolls recently, truckers left the Turnpike in droves taking state highways and local roads instead. That led to safety and traffic concerns in local communities, and the Commission eventually rolled back the toll increases.
from: www.tedstrickland.com
Posted by ear14 at July 18, 2006 12:07 AM
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Comments
Why are Ohio's politicians always so quick to suggesting giving up control of various resources? Selling off Ohio's resources to fix the budget now, means buying back or additional resources in the future. Lets stop moving the debt forward and try to fix it instead.
Posted by: Anonymous at July 18, 2006 07:54 AM
There will also be lower costs of operation because there will not be all the government red tape. They can't raise tolls too high because then people will stop driving on it. They can only charge as much as people are willing to pay. That is the way capitalism works.
Posted by: Chad at July 18, 2006 11:00 AM
That may be all well and good (the cutting down of government red tape via capitalism), however it doesn't seem like a positive way to stimulate economic profit, especially seeing how other communities have reacted to this proccess. For example:
in June Texas’ Harris County reviewed a study to privatize its 83-mile toll system that financiers had promised could bring in as much as $20 billion. According to the Houston Chronicle, the “privatization studies concluded that the county would have to cede most control over future toll hikes to get the best price for the toll road.” (June 21, 2006)
Despite the short-term windfall that promised billions of dollars, the Harris County Commissioners voted unanimously to keep the toll road system in public hands and maintain control of any future toll increases.
They even tried privatizing the highways in Canada (our good ol' liberal neighbor to the North). In 1999, Canada’s Ontario province sold off its Highway 407 near Toronto to a Spanish consortium for 99 years in exchange for $3.1 billion. According to the Toronto Star, tolls have skyrocketed 203 percent at peak times since then despite former Premier Mike Harris’ insistence that they would be capped.
Finally, in April, Ontario threw up its hands and admitted defeat. After losing 7 court challenges, the private highway operator “retains the right to raise tolls without government approval…” (Toronto Star, April 1, 2006)
As the Toronto Star put it in 2003, “Highway 407 was never supposed to be what it has become - a privately run vacuum cleaner for sucking money out of commuters' pockets.”
It just seems like it's going to hurt us more than help out Ohio's economy.
Posted by: Elis at July 18, 2006 11:30 AM
If the toll costs are too high and the road is not used, the additionals costs come back to haunt the government anyways as other roads cannot keep up with the added traffic. It would just delay potential costs to the government, that they may experience later.
Posted by: Anonymous at July 18, 2006 12:03 PM