Ohio Gov. John Kasich has his heart set on following Indiana to the pawn shop – only he’d take far less for his turnpike than Gov. Mitch Daniels took for his.
Kasich says he’s closing in on a deal to lease the 241-mile Ohio Turnpike to private investors, possibly for as little as $1 billion according to The Columbus Dispatch. That’s a far cry from the $3 billion he estimated last year and much lower than the $3.85 billion that the Daniels administration took in for the Indiana Toll Road.
OOIDA strongly opposes the long-term lease or sale of infrastructure to private investors. For starters, a lease is geared toward profits for the private investor, usually over a period of decades. The Indiana lease, signed in 2006, will last 75 years through 2081.
“They’re taking the easy way out, but unfortunately, the easy way out is the one that hurts motorists the most,” said OOIDA Director of Legislative Affairs Ryan Bowley. “This money would go to a private entity to guarantee its profit for decades.”
Under a lease deal, a private investor would pay a sum to the state – either all at once or over a period of time – for the right to operate and collect tolls.
The trouble is, and as Indiana is already experiencing, the short-term cash infusion dries up much quicker than the long-term lease, leaving toll payers on the hook for years to come.
“Looks like Ohio would go through its money even faster, yet we will have truckers, businesses, commuters and vacationers stuck with a deal like this for a very long time,” Bowley said.
Another downfall of a turnpike lease is built-in toll increases that guarantee profit to the investor. Again, with Indiana as the example, tolls were allowed to more than double for truckers during the first five years of the lease, and are guaranteed to keep up with the rate of inflation through the duration of the agreement.
Earlier this year, Kasich tapped the firm KPMG to study the viability of a possible lease. The study is costing $2.85 million and uses federal taxpayer funds.
If there’s a silver lining in this discussion, it’s that Gov. Kasich cannot sign a lease deal with an investor until the Ohio General Assembly approves enabling legislation. So far, that hasn’t happened.
Truckers are sure to be on the front lines to make their voices heard about the proposal.
full story
Kasich says he’s closing in on a deal to lease the 241-mile Ohio Turnpike to private investors, possibly for as little as $1 billion according to The Columbus Dispatch. That’s a far cry from the $3 billion he estimated last year and much lower than the $3.85 billion that the Daniels administration took in for the Indiana Toll Road.
OOIDA strongly opposes the long-term lease or sale of infrastructure to private investors. For starters, a lease is geared toward profits for the private investor, usually over a period of decades. The Indiana lease, signed in 2006, will last 75 years through 2081.
“They’re taking the easy way out, but unfortunately, the easy way out is the one that hurts motorists the most,” said OOIDA Director of Legislative Affairs Ryan Bowley. “This money would go to a private entity to guarantee its profit for decades.”
Under a lease deal, a private investor would pay a sum to the state – either all at once or over a period of time – for the right to operate and collect tolls.
The trouble is, and as Indiana is already experiencing, the short-term cash infusion dries up much quicker than the long-term lease, leaving toll payers on the hook for years to come.
“Looks like Ohio would go through its money even faster, yet we will have truckers, businesses, commuters and vacationers stuck with a deal like this for a very long time,” Bowley said.
Another downfall of a turnpike lease is built-in toll increases that guarantee profit to the investor. Again, with Indiana as the example, tolls were allowed to more than double for truckers during the first five years of the lease, and are guaranteed to keep up with the rate of inflation through the duration of the agreement.
Earlier this year, Kasich tapped the firm KPMG to study the viability of a possible lease. The study is costing $2.85 million and uses federal taxpayer funds.
If there’s a silver lining in this discussion, it’s that Gov. Kasich cannot sign a lease deal with an investor until the Ohio General Assembly approves enabling legislation. So far, that hasn’t happened.
Truckers are sure to be on the front lines to make their voices heard about the proposal.
full story
