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Robert Poole and Peter Samuel argue that Tony Soprano should be paying private tolls while those opening credits roll.

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  1. The experience in Canada turns out not to have been all wine and roses. One problem is that tolls went up a lot more than the government and voters were lead to believe. Wiki account:

    “Recently, the Ontario provincial government has quarrelled with 407 ETR over toll rates and customer service. On February 2, 2004, the government delivered notice to 407 ETR that they are considered to be in default of their contract because of 407 ETR’s decision to raise toll rates without first obtaining the government’s permission. The court’s initial decision sided with 407 ETR: on July 10, 2004, an independent arbitrator affirmed that 407 ETR has the ability to raise toll rates without first consulting the government. The government filed an appeal of this decision but was overruled by a Ontario Superior Court decision released on January 6, 2005; however, a subsequent ruling by the Ontario Court of Appeal on June 13, 2005 granted the government permission to appeal the decision. Legal troubles have placed future eastward extensions of the highway on hold, and it is unknown when construction may begin.

    The rising toll rates have made Highway 407 more of a “luxury” rather than a bypass on existing congested roads as it was initially intended. Parallel roads that Highway 407 would have supplemented ending up continued to grow congested just a few years after Highway 407 opened. As a result, the Ontario government had to revisit costly widening projects of Highway 401 and the QEW. Demographics showed that mostly businessmen and professionals used Highway 407 because they were able to write off the tolls as expenses.”

    Of course, one can argue that this luxury pricing scheme is a good thing — I just don’t like the idea that tolls rose a lot more than the voters were lead to believe when they agreed to sell of the road. There have been other perceived problems with this 407 ETR road, some implicating privacy. More at:

    http://en.wikipedia.org/wiki/Highway_407

    The linked article seems to take an overly rosy view of private ownership of the commons. Makes you wonder who paid for it.

  2. “Makes you wonder who paid for it.”

    Ahhh, the old “follow the money” routine. I’ll tell you what, shill – everyone, YOU INCLUDED – does everything in their self interest first. (Do you work for the Dept of Highways by any chance?)

    Either way – I agree that the problem is the misleading rates of raises – NOT the private ownership of roads. Cripes if people actually were forced to pay for the roads they drove on, we might actually have (GASP) less driving.

  3. Ahhh, the old “follow the money” routine. I’ll tell you what, shill – everyone, YOU INCLUDED – does everything in their self interest first.

    That is true. However, a journalist paid by a newspaper will have a somewhat different pattern of self-interest than a writer paid by a private roadmaker. I have seen it argued here that writer’s can compartmentalize their minds so that the payment will not have any affect on their opinions. Disagree. Sometimes you can even catch a whiff of the money. This article is not passing my smell test.

    Also disagree that the problem of raising the rates has nothing to do with private ownership. See how it really works, Finkelstein, is that when politicians raise the tolls dramatically and against voter expectations, then those politicians can be voted out of office. As you can see from the wiki portion I quoted, this handy, democratic feedback mechanism can be obliterated by private contract. In fact, this ability to raise rates without political accountability is probably the tail wagging the dog an cutting the checks here.

  4. Both New York and New Jersey should consider doing likewise, with initial proceeds focused on such urgent projects as replacing the obsolescent Goethals and Tappan Zee Bridges.

    Hmm, why not line up private investors to do that. They do that other places, France even.

  5. Actually, Dave, there are two interrelated points you are making here:

    1st – there certainly is a problem with “privatization” in that an asset that was created by taxation is now being “sold” to a private interest. Absent sufficient protections, a more accurate description of such a “sale” is “gift to political cronies”. That said, it’s better to privatize it now and end any further subsidization through taxation, and an open public auction coupled with a tax “give-back” could accomplish privatization in a nearly fair manner.

    2nd – the issue of overcrowding on nearby roads after privatization of the highway might speak more to the under-pricing of those roads than to the “over-pricing” of the highway. And under-pricing is a not so hard to understand consequence of government regulation of a commons.

    I am in fact convinced that much of the pollution and “sprawl” problems we have today are in fact a direct consequence of under-priced transportation.

  6. qb,

    1st point: My sticking point is, as you succinctly put it, the “absent sufficient protections” problem. My basic problem with the linked article is that the authors seem too cavalier about protections against future rent seeking on the road. I know they have that thing about how the rates are supposedly capped. Still too cavalier given: (1) the Canadian experience; and (2) commonsense realization that the private owners will be trying their damndest to bait and switch on the deal.

    2d point: Agree with you.

  7. As far as your third point: it costs me more to take the train than my fuel costs (at CDN gas prices) when I drive. So, yeah.

  8. Government has no business owning a business. The Post Office, Amtrak, Toll Roads, all should be privatised and in my humble opinion there isn’t a single legitimate reason not too. You can quibble about how the privatization takes place and under what conditions, fair enough.

    In the case of toll roads, the government has a continuing need to make bridge and road improvements and repairs because it ahs chosen to own those commons. It makes sense to me that the government should own common streets. How are you going to charge user fees in a way that doean’t screw thing sup royally for ordinary homeowners and businesses? It is less clear to me that the government should own any highway at all though. True, we’d all be paying tolls each time we took the highway. We are already paying for them anyway via taxes, at least this way the users pay for it all, instead of people who rarely use highways at all.

  9. “It makes sense to me that the government should own common streets.”

    Fair enough, but just realize that common streets are the result of the initial government interference. In the absence of coercive street building, you’d have a lot more private common “driveways” that connected to thruways. Such arrangements are common in the more rural sections of my state and work fairly well (except when they run into DOT regulations, which is a whole ‘nother story).

    Now that the common streets exist, there probably isn’t a clean way to privatize them, but the ownership should be pushed down to the municipality level.

  10. I’d have no problem with privatizing highways if I thought that we’d see a corresponding decrease in taxes to make up for the tolls we’d have to pay. The concern I’d have is my belief that government actors at any level will find a way to squander or steal any revenue gained from the sale of public assets to a private entity. Rather than look at the funds from the sale and savings in maintenance cost as a reason to lower taxes, their addiction to spending public funds on pet projects will consume any gains made by privatization. Taxes won’t go down, fees will go up, and the public will no longer have the option of selling the asset.

  11. David – I hear you there. In fact, I’d like part of the law to state that a portion of taxes usually earmarked for transportation would be eliminated.

    Of course, they’d just raise taxes somewhere else, so in the end we’d probably still get screwed.

  12. If the satelite tests from yesterday pan out with the whole price by the mile scheme, that opens up the door for private ownership of the more local common streets. HOA’s and private investors could get payment and you wouldn’t have to stop to pay tolls. It would also lessen the anti-competetiveness of the governments current gas tax road pricing scheme. There are of course the privacy issues, but I like the idea of being able to check my monthly road bill to see where I’ve been and how much it’s costing, and if you’ve ever had a car stolen, the ability to get it found right now doesn’t sound so bad.

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