(HT: Plunderbund Facebook reader Rhonda Stoner)

Any time Governor Kasich talks about privatizing the Turnpike, he talks about how easy it’ll be for the State of Ohio to get a couple of billion dollars for it:

"Wouldn’t it be fantastic if I could take another country in Ohio called the turnpike, if I could privatize it and generate as much as $2.5 billion, potentially?—Gov. John Kasich [Source: Cleveland Plain Dealer, (02/10/11)]

After all, Kasich and his pro-privatization allies argue, Indiana was able to get $3.8 billion for leasing its Turnpike.  Even with the credit markets as they are, we can surely get nearly $3 billion for a smaller stretch of road, amIright?

So, how’s the Indiana Turnpike idea working out?

IndianaTurnpikeDefault It turns out that the company that is leasing the Turnpike for 75-years in 2006, is already in danger of defaulting on some of its financial for the deal five-years into it.  (That’s 7% of the lease term, they’re soooo close.)

And why are they in danger of default?

[Indiana Finance Authority Chairman Christopher] Ruhl stated the Indiana Finance Authority has been aware that interest expense has exceeded gross Toll Road revenue for years. He said that was "not a surprise" given the amount the private consortium borrowed to pay for the lease.

In layman terms, their monthly income consistently is less than their mortgage payments.  But don’t worry they’ve got a great plan to get out of this:

Tolls for cars driving the length of the road are now $8.80 as compared to $4.65 when the lease was signed. Tolls for large semitrailer trucks are now $35.20, as compared to $18 when the lease was signed. Tolls are scheduled for another increase July 1.

So, after nearly doubling the tolls, the company still can’t break make a profit and is in reported danger of default by 2015, so their solution is raising the tolls more.

How’s this a good idea for Ohioans again, Governor?

Evangelize!
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  • Anonymous

    Sell, Sell Sell!!!!!!

  • Annekarima

    Get the money up front!!!

  • Anonymous

    If turnpikes were profitable ventures, we’d likely have seen the private sector build many more of them. I don’t understand how selling public infrastructure (that was paid for with tax dollars) is somehow okay. That’s not the governor’s road or the legislature’s road, it’s the people’s road.

    (same with the parks, etc)

  • Anastasjoy

    I travel to Chicago frequently from Cleveland. I no longer take the turnpike. Yes, it’s a little longer to take Rte. 20, and you have to watch out for buggies in northwestern Indiana (one cut right in front on me to go into a gas station — I wonder if they sell oats for the horses there too?), but it’s scenic and it’s free. Ohio turnpike tolls have also nearly doubled in the last couple of years. I can only imagine what they’d be if the turnpike is privatized. I used to take it from Westgate to Elyria for $5.15 just two years ago. Then it was raised to $9. Not worth the money. Rte 2 to Toledo (where you can pick up 20 on the far side of the bypass) is very scenic too and there are a lot of roadside farmer’s stands in the summer and fall. With the money I save, I by produce from Ohio small family farmers.Up yours, Kasich.

  • Annekarima

    Time does change things.  When I was young, strange to say that, my dad’s farm was “Amish friendly”.   One summer morning he went to prepare the barn for milking and noticed something different.  The feed bins had been used overnite while the cows were in pasture and the gate moved.  He found horse tracks.  And oates in the bins.  We had quietly been “invaded” during the night by our “friends” on their way to somewhere who knew they could use my dad’s barn to refresh their animals and rest a bit on their journey.  And our dogs never even woke us.   Sorry I venture off topic….

  • Anonymous

    Well, Indiana did, but that doesn’t solve the problem.  They now have a lessee who is struggling to make a profit.  That means high toll rates and less maintenance.

  • Anastasjoy

    The other issue with maintenance is that as tools go up, parallel free routes get torn up. This has already happened in Ohio with trucks moving Rte 2 after turnpike tolls went up so much. Now if a private company takes over turnpike maintenance but raises tolls so much that traffic switches to free publicly maintained roads, the taxpayer takes the hit for that. Or at least the low-income and middle-income taxpayers do because Kasich is doing his best to see that the rich never pay taxes.

  • Annekarima

    True. So we have a no win situation with more taxes on those who cannot afford it.

  • Fotogirlcb2002

    I personally think that anything that was built with any tax dollars should go before the public for a vote. If its our tax money involved then we should all have a say in the selling of it and for what cost and whos buying it.I keep hearing about less government then why should we let them sell off state assets for $1.00 and why let some foriegn country come in and buy our assets.
    By the way have you all now heard the bridge to Kentucky will be possibly be cost shared by Ohio and Kenctucky and may be a toll bridgr? ( when and if built new ) Statement made by Jerry Wray head of ODOT.  ( by the way is a double dipper –salary from state and a pension )
    Whats fair about this ? we pay to build it then pay to drive on it. Always the tax payers pockets.

  • Anonymous

    The problem is (and Kasich consistently ignores this, which is unsurprising), the Ohio Constitution requires that any proceeds of tolls and fees related to the use of highways in Ohio must be spent for highway purposes. So Turnpike tolls can only be spent on the Turnpike or other roads and bridges. 

  • Anonymous

    I lived in Indiana at the time of the “conversion.” None of the toll road workers, (zip, zero, nada) were retained by the new concession Company.

     Jobs that paid over $18/hr plus benefits went to $8/hr, with the stoke of Republican Govenor Mitch Daniels’ pen, when the Indiana Toll Road was leased to a foreign company.

    Since the sale of the Indiana Toll Road, even more jobs have been lost when the concession company layed off works and replaced them with self serve koisks.

    Don’t even get me started on maintenance… over flowing trash cans and repaving with substandard materials that begin to breakdown in less then 6 months. Mow the grass? you must be kidding right? MAYBE the Indiana Toll Road Concession Company will mow the grass once a summer.

  • Anonymous

    Uhhh, that is what Indiana did when they leased the Indiana Toll Road. You just read the concession company can’t make their bank loans and is in danger of default.

    If the Indiana Concession Company defaults, do you think the bank will run the Indiana Toll Road? No…they will close it down until a buyer can be found, which is something that can’t happen.

    So who do you think will have to pickup the tab to keep the Indiana Toll Road open? Yep, you got it, the Indiana Tax Payer.

  • http://www.facebook.com/nate.stickney Nathantagonist Bad-guy Stickne

    I have to be honest, I should like to read this site.  My disdain for John Kasich is similar to my father’s disdain for Gov. Rhodes, which I learned when I was young.  (We were driving in FLA and there was a Rhodes Blvd.  My dad called it “Horse’s Ass Blvd.)

    I can’t read this site anymore.  Not because of anything PB does, in fact, it’s because you do your job too well.  No, it’s because the anger inside of me after I read this type of nonsense is nearly enough to move me back to America this coming spring and run for office in 2012.  

  • Anonymous

    To borrow a phrase from a Huckleberry former VP candidate who went to Fox TV, I don’t live in Indiana, but I can see it from my back porch.
     
    I recall five years ago when Mitch Daniels announced that he had come up with a plan to solve Indiana’s problems (the idea came to him while he was in the shower, or so he said, and I am not making this up) by selling the Indiana Toll Road.  Embraced by the Republican majority in Indianapolis, but rejected by the counties, which actually depended on the toll road to facilitate commerce in their area, the plan was crammed through the legislature.  After six months of heated debate and compromise (mostly compromise because the Indy republicans held a big gun to the citizen’s heads) Mitch got his way.  Before the ink could dry on the lease, someone in the legislature realized that they had sold to a foreign company and a quick amendment had to be inserted to the agreement that they would be required to fly the American flag on the facilities to prevent them from flying a Spanish or Australian banner.
     
    As anyone who travels an interstate highway knows, every so many miles there is a paved “turn-a-round” for maintenance, emergency and police vehicles so that they can get to areas of concern like accidents.  The company who held the lease immediately put in permanent metal barricades at these safety points to prevent motorists from turning around.  This, of course, also prevented first responders from having the quickest access to an accident site (and there are many on super highways), so further negotiations had to be made with the company to replace the barricades with movable ones that the fire, ambulance and police could stop at, move out of the way, move through and then replace before proceeding to the accident.  When seconds count for an accident victim!!
     
    Indiana’s toll road was never the best maintained before it was sold, primarily because they disbanded their toll road commission and gave control to IDOT.  This resulted in the use of toll revenue for other projects in the state, unlike the charter for the Ohio Turnpike, which requires the revenue to be used on the toll road.  For this reason, maintenance of the Turnpike has always been the highest standard, the road is always cleared of snow, dead animals, tire debris and wrecks and well patrolled by OSHP, which maintains a dedicated crew of Troopers on the Turnpike.  Jerry Wray would say that the Commission pays too much for trucks, too much for maintenance and too much for it’s employees, but I say that it is not the commission but the patrons who demand this kind of service for their tolls. What Kasich and his Pirates do not understand (OK, I know you are thinking that there isn’t much that they DO understand, but stay with me on this point) is that these are services that the turnpike patrons are willing to pay extra for to drive on a well maintained and regulated highway, When they pay extra, they expect extra, and neither ODOT nor a private “concessionaire” will provide that service.  The Turnpike should be a model of what 21st Century roads should be like, but in Indiana and in other states where the only consideration is how much money you can get in the DOT fund you get crappy service at a high price to the consumer. The only consideration for the highway operator should be what the highway’s patrons want, not how much money they can divert to other operations or for profit.  I believe that the Ohio Turnpike Commission has done a good job and that they should keep on doing it.
     
    Government should be of the people, by the people and for the people of the state, the citizens and not the corporations.  This is a concept that the partisan, fascist, republicans in this state will never get.
     
     
     
     
     
     
     
     
     
     
     

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