In a resounding victory for the citizens of Ohio and for common sense in general, Ohio’s Governor, John Kasich has decided not to lease the Ohio Turnpike to foreign investors. This decision will keep the Ohio Turnpike from going the way of Indiana Toll Road which was famously leased out to private investors until 2081.
The lease would have been a short-term boon, but a long-term travesty for the state. Instead, Governor Kasich has made the decision to fill the $1.6 billion dollar budget gap by other means. His proposal would immediately raise $1.5 billion by selling bonds that would be backed by future toll revenues. Governor Kasich also claims that an addition $1.5 billion could possibly be generated by matching local and federal funds.
“Toll revenues” might make you twitch a bit, and yes, tolls will be raised under his plan, but not even close to the extent to which they might have been raised if the road had been privatized. There is a provision for commercial vehicles which would not allow the tolls to increase faster than inflation. Given that the Indiana Toll Road privatization saw tolls almost double, tolls increasing at the rate of inflation should be acceptable.
Though effective, this proposal will prove to be only a temporary stop-gap for a floundering budget. Permanent changes will need to be made to keep state revenue robust enough to be able to maintain roads and bridges. Ohio is not the only state struggling to put together a responsible highway budget. From time driven and distance driven tolls to fuel tax increases, other states are experimenting with different ways to meet their funding goals, but only time will tell what strategies work.
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Source: thetrucker
Gary says
Supported by bonds? So the foreign group is paying for it and making money from it without lifting a finger. Yep. Sure worked out, huh?