Government Of, By and For the Businesses
For sale: America's infrastructure
Posted: June 07, 2008 1:00 am Eastern
By Henry Lamb
In the 1960s, the people of Florida borrowed a bunch of money to build a highway from Naples to the East Coast. To repay the construction costs, the state charged a small fee to each traveler who used the road. The idea worked so well that in the 1980s, they borrowed another bunch of money to widen the road to four lanes to meet interstate highway standards. The toll was increased to repay the construction costs.
The construction costs are now repaid. What should be done about the toll fee?
A. Eliminate it, since the debt is repaid.
B. Reduce it to an amount sufficient to pay maintenance costs.
C. Increase the toll for 50 to 75 years, to line the pockets of private investors.
The correct answer, of course, is "C," according to the Florida Department of Transportation.
Chicago built a toll-way; it brought $1.83 billion, leased for 99 years to a foreign financial group.
Indiana built a toll-way; it brought $3.85 billion, leased for 75 years to the same foreign financial group.
Texas wants to build a toll-way; the offer is $7.2 billion for 50 years.
Governments are going berserk looking for highways, bridges and other municipally-owned revenue-producing infrastructure that may be leased to private operators for big bucks up front. Government officials praise the idea as the perfect answer to budget shortfalls. The idea is sort of like manna from heaven for the current officials; they get tons of cash to spend, but will be long gone when the people who are paying the bill begin to want accountability from their government officials.
This idea of selling off (long-term leasing) of American infrastructure is fundamentally flawed.
In Florida, the toll-way up for grabs is "Alligator Alley," a 78-mile stretch of I-75 between Naples and the East Coast. At a toll of $2.50 per vehicle, the construction costs have been paid, and the road is now generating annual profits of about $23 million. Why should users of the toll-way be forced to continue paying the toll now that the construction debt is paid? If any toll can be justified, the amount should not exceed the amount needed to pay for maintenance.
The state is not considering reducing the toll; the state is chomping at the bit to negotiate a long-term lease that will surely increase the toll. When the state built the road, it acted as trustee for the people who paid for the road. Now, rather than acting as trustee for the people who rightfully own the road, the state government claims ownership and wants to force the very people who have paid for the road to now pay an additional fee for using it.
Back when Alligator Alley was first proposed, the elected officials of Collier and Broward Counties had to approve it, and pledge their county's portion of the fuel tax to the retirement of the construction debt. The Collier County commissioners sent their chairman, Tom Henning, to a recent meeting scheduled by Florida transportation officials. The message he brought in behalf of the county's elected officials: "We are opposed to leasing Alligator Alley." About 100 area residents cheered in agreement.
This decision by the county's elected representatives of the people who paid for the project should end the discussion. But it will not.
It will take a major rebellion by the people to prevent this gross injustice. The people have formed the Citizens Transportation Coalition to mount that rebellion. But it will take more than the people of Collier and Broward Counties to stop this money-grab by Florida's government.
People in every state should be concerned. At least 14 states have now passed legislation that allows governments to sell or lease infrastructure for which the people have already paid. Every sale/lease deal of American infrastructure, whether to foreign or domestic private financiers, forces the people to pay again and again and again for the privilege of using their own infrastructure.
The elected and appointed officials who promote the sale of infrastructure know they are likely to be out of office when the toll rate begins to rise. In Indiana, for example, the deal negotiated required the toll rates to remain relatively static for the first 10 years, before rapid increases were authorized. Who can be held accountable then?
Despite all claims to the contrary made by government officials that they will protect the interests of the toll road users, there can be no lease deal that will not penalize the users and force them to pay again and again for using the road the road they have already bought.
Posted: June 07, 2008 1:00 am Eastern
By Henry Lamb
In the 1960s, the people of Florida borrowed a bunch of money to build a highway from Naples to the East Coast. To repay the construction costs, the state charged a small fee to each traveler who used the road. The idea worked so well that in the 1980s, they borrowed another bunch of money to widen the road to four lanes to meet interstate highway standards. The toll was increased to repay the construction costs.
The construction costs are now repaid. What should be done about the toll fee?
A. Eliminate it, since the debt is repaid.
B. Reduce it to an amount sufficient to pay maintenance costs.
C. Increase the toll for 50 to 75 years, to line the pockets of private investors.
The correct answer, of course, is "C," according to the Florida Department of Transportation.
Chicago built a toll-way; it brought $1.83 billion, leased for 99 years to a foreign financial group.
Indiana built a toll-way; it brought $3.85 billion, leased for 75 years to the same foreign financial group.
Texas wants to build a toll-way; the offer is $7.2 billion for 50 years.
Governments are going berserk looking for highways, bridges and other municipally-owned revenue-producing infrastructure that may be leased to private operators for big bucks up front. Government officials praise the idea as the perfect answer to budget shortfalls. The idea is sort of like manna from heaven for the current officials; they get tons of cash to spend, but will be long gone when the people who are paying the bill begin to want accountability from their government officials.
This idea of selling off (long-term leasing) of American infrastructure is fundamentally flawed.
In Florida, the toll-way up for grabs is "Alligator Alley," a 78-mile stretch of I-75 between Naples and the East Coast. At a toll of $2.50 per vehicle, the construction costs have been paid, and the road is now generating annual profits of about $23 million. Why should users of the toll-way be forced to continue paying the toll now that the construction debt is paid? If any toll can be justified, the amount should not exceed the amount needed to pay for maintenance.
The state is not considering reducing the toll; the state is chomping at the bit to negotiate a long-term lease that will surely increase the toll. When the state built the road, it acted as trustee for the people who paid for the road. Now, rather than acting as trustee for the people who rightfully own the road, the state government claims ownership and wants to force the very people who have paid for the road to now pay an additional fee for using it.
Back when Alligator Alley was first proposed, the elected officials of Collier and Broward Counties had to approve it, and pledge their county's portion of the fuel tax to the retirement of the construction debt. The Collier County commissioners sent their chairman, Tom Henning, to a recent meeting scheduled by Florida transportation officials. The message he brought in behalf of the county's elected officials: "We are opposed to leasing Alligator Alley." About 100 area residents cheered in agreement.
This decision by the county's elected representatives of the people who paid for the project should end the discussion. But it will not.
It will take a major rebellion by the people to prevent this gross injustice. The people have formed the Citizens Transportation Coalition to mount that rebellion. But it will take more than the people of Collier and Broward Counties to stop this money-grab by Florida's government.
People in every state should be concerned. At least 14 states have now passed legislation that allows governments to sell or lease infrastructure for which the people have already paid. Every sale/lease deal of American infrastructure, whether to foreign or domestic private financiers, forces the people to pay again and again and again for the privilege of using their own infrastructure.
The elected and appointed officials who promote the sale of infrastructure know they are likely to be out of office when the toll rate begins to rise. In Indiana, for example, the deal negotiated required the toll rates to remain relatively static for the first 10 years, before rapid increases were authorized. Who can be held accountable then?
Despite all claims to the contrary made by government officials that they will protect the interests of the toll road users, there can be no lease deal that will not penalize the users and force them to pay again and again for using the road the road they have already bought.
posted by Mario R. Sanchez, Ph.D. at
9:21 AM
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