Reason Writers Around Town

In the Wall Street Journal, Robert Poole stands up for public-private toll road partnerships against Lou Dobbs and other rapscallions.

Comments

[Warren]

Where are the flying cars? They said there'd be flying cars. I want my flying car!

[Mo]

What no mention of the failed toll lanes on the 91 in California? As a result of the non-compete agreement, traffic from Riverside & SB counties was snarled and it made rush hour traffic horrifying. This is more of an argument on the deals the governments cuts wrt privatization, but something that needs to be kept in mind.

[VM]

Warren - you in St. Louis now?

[Fenevad]

The Indiana toll road lease bit isn't all the article makes it out to be. It leaves out the little bit about the state government being on the hook for any outstanding debt of the lessee should the lessee default. That got quite a bit of outrage here in Indiana. So basically there is no consequence to the toll road operator if it does something stupid and runs up debts it can't pay off since the state will cover it. Bad idea, IMHO.

The other problem I see with this is that if we're going to pay the tolls on the new In-37 toll road corridor, shouldn't we see a reduction in taxes to some extent? Instead those of us who happen to live on In-37 end up paying the same taxes as everyone else, plus the tolls that people who live on equally major roads don't pay.

The solution, as far as I'm concerned, would be to move to a mileage tax (you don't drive, you don't pay) or to make all of the major corridors toll and drop the gas taxes be an appropriate amount.

But that won't happen. You could privatize the entire highway system and the taxes wouldn't drop a bit...

Fenevad

[Dan T.]

I guess the fundamental problem with toll roads is that they act as a regressive tax.

People without much money still need to get to their jobs, you know.

[MP]

I guess the fundamental problem with toll roads is that they act as a regressive tax.

You could say that about any user fee. But so what?

[Dan T.]

It's a problem because it's not a good idea for society to make poor people poorer if we can help it.

[sage]

We must live in a pretty great country where a person is condsidered "poor" and they own a car.

[Meyer]

I agree that this sounds like a good idea in theory, but in practice it seems to be just another corporate welfare scheme.

[STEPHEN THE GOLDBERGER]

is it a good idea for society to have people pay for things that they use?

[Warren]

VM,
No, but that's the closest outpost of civilization. A mere 100 miles down the road (literally). I've been a Show Me stater since last Oct.

[Lowdog]

But just think if a lot more things were privatised, and, contrary to Fenevad (who is nonetheless most likely correct), taxes dropped considerably. Do you not think poor folk would benefit in many ways as they get to pick specifically what they will and will not be taxed on via which goods and services they consume?

[FinFangFoom]

I don't get why it's a corporate welfare scheme. It's just bringing project finance from developing countries to the US.

[stephen the goldberger]

the problem with privatizing the roads is that every road owner has a monopoly on getting from point a to point b. To have the government hand out monopolies to corporations seems like a bad idea to me.

[Dan T.]

We must live in a pretty great country where a person is condsidered "poor" and they own a car.

Yes, there's no doubt that relative poverty is preferred to absolute poverty. But that doesn't mean that relative poverty is not a real problem.

[FinFangFoom]

As to the state picking up the tab in the event of lessee default, you could require the operator to set up a subsidiary operating corporation to run and finance the thing and not allow the parent corporation to take money out of the subsidiary until debts are paid off. It would also potentially make it easier for the parent corporation to sell the operating corporation if it desired to without having to go back to the state.

[FinFangFoom]

If the state limits the amount of toll to some formula, that controls the urge of the monopolist to screw over motorists. If the state is contracting with the company, and the company doesn't keep the road in a certain condition as established by a contract, then the company will have breached its contract and the state can get the road back.

[Mr. Steven Crane]

We must live in a pretty great country where a person is condsidered "poor" and they own a car.

or, you know, we live in a country where a car is a necessary component for existence in all but the most major of cities.

necessities aren't luxuries.

[VM]

Hi Warren.

cool.

[FinFangFoom]

If cars are a necessity because people choose to live far apart and not use buses, is it a good idea for the state to make that an easier choice? Does rail travel suck and not go anywhere because it must by its nature or because it was made unprofitable by the government subsidized building of superhighways that move people and goods?

[MP]

So user fees are a bad things because poor people shouldn't be forced to bear the burden of their choices? Is this coming from the same side of the aisle that says we need urban planning and high density in order to force people to make different choices?

[Mr. Steven Crane]

So user fees are a bad things because poor people shouldn't be forced to bear the burden of their choices?

"Are there no prisons? Are there no workhouses?"

[FinFangFoom]

Toll Road = Debtor's Prison

Got it.

[VM]

Fing - I see you've been on the TriState by Deerfield during rush hour...

[terry]

Fenevad--Those who outraged in Indiana are the backward types who resent progress or doing things a different way. The 3.8 billion that the state got will build a lot of toll-free roads. The state can still limit the toll increases and maintains oversight. If the private company fails to live up to their end, the state can go to court and nullify the lease. Improvements in the toll road have already begun. It's a brilliant example of leadership by the governor in a state where innovation in financing is to find some service or item that hasn't been previously taxed.

[Lamar]

One of the advantages of private management is that private companies have the resources to go out and hire enough experts to focus on infrastructure management. The government just isn't able to fund that type of investment. If the choice is between a state-managed road and a road managed by MacQuarie Bank, I'll take the latter. BTW: I was surprised toll roads weren't a bigger part of the transportation planning story in this month's issue.

[lunchstealer]

most of my experience with toll roads are intra-city. Dallas has a set of tollroads that are expansions to the freeway network. There are alternatives to all of the toll roads, so there's no question of a regressive tax on the poor. No on has to take those roads, they can always take alternate routes - although they may take longer and be somewhat less convenient. I know quite a few people who never took the toll roads while they were in college. It wasn't until I got a full time job after grad school that I started using the tollway on an even remotely regular basis.

[FinFangFoom]

Anybody know what the Indiana toll roads cost?

[VM]

Fing:

hier

[highnumber]

MP,

Why regulation?
I don't understand why government is in the business of regulating unions anymore. Maybe it made sense 75 years ago when union organizers would be taken out behind the woodshed and beaten senseless by company thugs, but is that really such a concern nowadays?

MP, http://www.reason.com

Daily Controversy
Chicago Sun-Times Monday, March 05, 2007

Bill Pope's comment from the same thread was also printed.

[FinFangFoom]

Thank, VM.

Those prices don't seem bad. Just a couple of gallons of gas.

[MP]

highnumber,

thx for highlighting that. I had no idea. 🙂

[VM]

Fin:

WHAT!!! No Hybrid? No DODGE STRATUS!!!!! Where's the solar powered car? hyperdrive?

mein Gott.

MP - congrats!

[Gilbert Martin]

I would expect that a private entity could build a road more cost effectively than the government could as it would be free to actually contract the job on a REAL competiive basis and not have to comply with such things as the Davis-Bacon Act (a political giveaway to labor unions) or minority set aside racial spoils schemes - all things that cost the taxpayers more money when the government is running the show.

[Fenevad]

Terry:

Fenevad--Those who outraged in Indiana are the backward types who resent progress or doing things a different way. The 3.8 billion that the state got will build a lot of toll-free roads. The state can still limit the toll increases and maintains oversight. If the private company fails to live up to their end, the state can go to court and nullify the lease. Improvements in the toll road have already begun. It's a brilliant example of leadership by the governor in a state where innovation in financing is to find some service or item that hasn't been previously taxed.

I actually have no problem with the idea in principle. It just irks me that there is the proviso in there that says that the lessee can walk away leaving the state to pick up the tab if they screw up. I guess, in the end though, that doesn't really make a difference, because if they went belly up even without it, the state would still pick up the tab since it wouldn't let the roads disappear.

In any event, as someone who lives on the In-37 corridor that they want to turn into a toll road, I really do wish that there were some other alternative, like a use tax instead of targeting the particular road I have to use for revenue collection. If I lived a few miles away on In-67, for instance, I would not have to pay the toll and they would get the same amount of taxes out of me. That's why I wish we would either more to more tolls/less taxes or the use tax...

If I seriously thought that anything would lead to a compensatory reduction in gas taxes, I would support making all of the state highways with over a certain amount of traffic into tollways.

However, regarding the state's tax policy, I have to agree: any state that still had an inventory tax in the twenty-first century should have its legislators fired for dereliction of duty. I was stunned when I moved here to see it still existed twenty years after most of the country ot rid of it. All part of the general sense of time warp I experienced in moving here...

-Fenevad

[Sparky]

Warren,

"No, but that's the closest outpost of civilization. A mere 100 miles down the road (literally). I've been a Show Me stater since last Oct."

Do you in Rolla? 100 miles down I-44 from St. Louis. I went to college there. If that's where you are now, then you have my condolences, sir. I hope you get to enjoy the hiking and canoeing in So. MO when it warms up though - it's beautiful.

[TLB]

Much like "liberals" enforcing Stalinist throwbacks like hate speech laws, the libertarians at Reason continue to amaze, supporting selling off vital U.S. infrastructure, putting the U.S. at the mercy of foreign companies, and calling it "freedom".

A couple of points don't seem to have made it through Poole's thick skull:

1. The TTC has a non-compete clause, meaning that nearby roads that might take traffic from the TTC cannot be maintained. (Why do libertarians always end up supporting subsidies and monopolies?)

2. The hardly-known news that MacquarieCompany - partners with the Spanish company that's involved in the TTC on an IndianaProject - has bought up a chain of 40 small newspapers in Texas. Now, certainly, that could just be a coincidental business decision. Uh huh.

There's a lot of information available out there about the TTC, and once you see everything that's involved you'll have yet another reason to distrust anything Reason says.

[P Brooks]

I would have liked to get in on this when it was alive, but...

I was skiing. Take that, you Hoosier clems.

After spending more years than I care to admit working in Indianapolis, my expectation is that the Toll Road deal will be a spectacular bungle. Remember, the principal reason the State came up with to justify the lease of the Toll Road boiled down to, "We're just not smart enough to run this road." While that may be completely correct, it does not inspire much confidence in "your man Mitch's" ability to negotiate a favorable deal.

Don't forget their canny negotiations in the matter of LucasOil Stadium, their current welfare for millionaires scam.

[FinFangFoom]

Oh No! We'll be at the mercy of foreign companies! How will we ever defend ourselves against a road in our midst!

[Lamar]

"How will we ever defend ourselves against a road in our midst!"

Do as Ben Stein suggests. Buy MacQuarie.