Indiana Toll Road: Aesop fable or Grimm fairy tale?
Will Hoosiers drive happily ever after?
January 24, 2006
BY JACK COLDWELL
Northwest Indiana Times
Copyright 2006
The "selling" of the 157-mile Indiana Toll Road is toughest for Gov. Mitch Daniels in the northern Indiana counties.
Here, the Toll Road, like the wondrous goose of the Aesop fable, has provided golden eggs of economic development, transportation convenience and funding for infrastructure improvements.
The governor's plan to lease the Toll Road to private operators long-term is viewed by critics in the north as a greedy scheme to sell the road that lays the golden eggs, an attempt to get the gold all at once -- billions of dollars upfront to use on long-delayed highway projects all over the state. They would prefer not to share for the decades-long length of the lease.
Legislators and community leaders elsewhere in the state are more receptive, some even delighted. After all, no toll road gold has come their way before.
Unlike the unlucky lady in the fable who winds up with neither goose nor gold, the governor knows what he is doing. He would not kill the road or even actually sell it, although a lease for 75 years would in effect sell the right to operate the Toll Road for beyond the lifetime of most living Hoosier taxpayers.
The gold during the lease would go to the private investors.
A long-term lease would be patterned after the deal in which Mayor Richard Daley obtained $1.8 billion through the 99-year lease of the Chicago Skyway to a Spanish-Australian consortium.
What are the short-term and long-term ramifications of such a lease in Indiana, politically and economically?
The ending could be that "they drove happily ever after." Or, that the governor was as mistaken as the woman who did in Aesop's golden goose.
Short term?
The governor would gain politically in much of the state by speeding up long-delayed highway projects. He would have an immediate bonanza of goodwill based on positive announcements and contract-letting and groundbreaking before the 2008 elections, if he seeks a second term.
Daniels says his Major Moves plan for highways, with the key Toll Road lease, would create jobs and spur economic development.
But in the short term, he also might lose voter support in northern Indiana among Republicans, Democrats and Independents, who would be unhappy with higher tolls and loss of the annual gold from Toll Road profits.
Lease critics compare higher tolls -- and many agree tolls would rise often and considerably -- to a tax increase paid only by Hoosiers who live near the road and use it often. There would be grumbling that people in Indianapolis, Evansville or elsewhere who don't use the road would gain from the lease's windfall.
The governor has promised northern Indiana would share in the windfall and come out ahead, because cherished projects could not move ahead without gold from the lease.
Long term?
This is more difficult to analyze.
No reputable economist would claim to know now what the economy will be like in 2081, if the lease is for 75 years.
In decades to come, a lease could be viewed positively if the Toll Road were running smoothly, with proper maintenance and safety and with the private operators adding lanes and other improvements to increase traffic flow.
Positive economic development could follow in areas where the upfront money was used to build roads and bridges.
But a negative view would prevail along the Toll Road corridor if tolls were perceived as excessive, if the operation wasn't smooth, if maintenance were poor and if the operators were reaping huge profits during 75 years with little benefit going to counties along the corridor.
Guesses range from suggestions that private operators could fail and default, handing back a crumbling road, to claims the operators eventually could make a profit each year equal to what they paid upfront.
Politically, it might not matter much in the long term. Most Hoosier voters in 25, 50 or 75 years likely would not know or care which governor made the Toll Road deal or his party affiliation. The real political impact, plus or minus, would come in voter perception this fall, in 2008 and perhaps in a few elections after that.
Economically, it might matter more in the long range. High tolls that discourage truck use and curtail development of warehousing and distribution centers near the Toll Road would be a blow to economic development in the northern tier.
But if the upfront money actually helped Indiana catch up on road demands -- and to maintain what was built -- the statewide economic impact would be positive.
The opinions are solely those of the writer.
© 2006 The Northwest Indiana Times www.thetimesonline.com
January 24, 2006
BY JACK COLDWELL
Northwest Indiana Times
Copyright 2006
The "selling" of the 157-mile Indiana Toll Road is toughest for Gov. Mitch Daniels in the northern Indiana counties.
Here, the Toll Road, like the wondrous goose of the Aesop fable, has provided golden eggs of economic development, transportation convenience and funding for infrastructure improvements.
The governor's plan to lease the Toll Road to private operators long-term is viewed by critics in the north as a greedy scheme to sell the road that lays the golden eggs, an attempt to get the gold all at once -- billions of dollars upfront to use on long-delayed highway projects all over the state. They would prefer not to share for the decades-long length of the lease.
Legislators and community leaders elsewhere in the state are more receptive, some even delighted. After all, no toll road gold has come their way before.
Unlike the unlucky lady in the fable who winds up with neither goose nor gold, the governor knows what he is doing. He would not kill the road or even actually sell it, although a lease for 75 years would in effect sell the right to operate the Toll Road for beyond the lifetime of most living Hoosier taxpayers.
The gold during the lease would go to the private investors.
A long-term lease would be patterned after the deal in which Mayor Richard Daley obtained $1.8 billion through the 99-year lease of the Chicago Skyway to a Spanish-Australian consortium.
What are the short-term and long-term ramifications of such a lease in Indiana, politically and economically?
The ending could be that "they drove happily ever after." Or, that the governor was as mistaken as the woman who did in Aesop's golden goose.
Short term?
The governor would gain politically in much of the state by speeding up long-delayed highway projects. He would have an immediate bonanza of goodwill based on positive announcements and contract-letting and groundbreaking before the 2008 elections, if he seeks a second term.
Daniels says his Major Moves plan for highways, with the key Toll Road lease, would create jobs and spur economic development.
But in the short term, he also might lose voter support in northern Indiana among Republicans, Democrats and Independents, who would be unhappy with higher tolls and loss of the annual gold from Toll Road profits.
Lease critics compare higher tolls -- and many agree tolls would rise often and considerably -- to a tax increase paid only by Hoosiers who live near the road and use it often. There would be grumbling that people in Indianapolis, Evansville or elsewhere who don't use the road would gain from the lease's windfall.
The governor has promised northern Indiana would share in the windfall and come out ahead, because cherished projects could not move ahead without gold from the lease.
Long term?
This is more difficult to analyze.
No reputable economist would claim to know now what the economy will be like in 2081, if the lease is for 75 years.
In decades to come, a lease could be viewed positively if the Toll Road were running smoothly, with proper maintenance and safety and with the private operators adding lanes and other improvements to increase traffic flow.
Positive economic development could follow in areas where the upfront money was used to build roads and bridges.
But a negative view would prevail along the Toll Road corridor if tolls were perceived as excessive, if the operation wasn't smooth, if maintenance were poor and if the operators were reaping huge profits during 75 years with little benefit going to counties along the corridor.
Guesses range from suggestions that private operators could fail and default, handing back a crumbling road, to claims the operators eventually could make a profit each year equal to what they paid upfront.
Politically, it might not matter much in the long term. Most Hoosier voters in 25, 50 or 75 years likely would not know or care which governor made the Toll Road deal or his party affiliation. The real political impact, plus or minus, would come in voter perception this fall, in 2008 and perhaps in a few elections after that.
Economically, it might matter more in the long range. High tolls that discourage truck use and curtail development of warehousing and distribution centers near the Toll Road would be a blow to economic development in the northern tier.
But if the upfront money actually helped Indiana catch up on road demands -- and to maintain what was built -- the statewide economic impact would be positive.
The opinions are solely those of the writer.
© 2006 The Northwest Indiana Times
posted by Porkus Maximus Tex: at Tuesday, January 24, 2006
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