Posted on 01/20/2007 4:58:00 PM PST by A. Pole
Across the country, state highway officials are almost giddy about the prospects of selling the right to build toll roads to private investors. Financial wizards have learned how to amass gigantic pools of capital to pay the states for the privilege. Prestigious financial institutions are promoting the new method of financing infrastructure as the greatest development since sliced bread.
Left out of the equation is the consumer – the poor working stiff who has paid exorbitant local, state and federal taxes on every gallon of gasoline he ever purchased so that highway officials would have the funds necessary to construct new highways as needed and keep them in good repair. Under this new scheme for financing infrastructure, the poor working stiff gets to continue paying the exorbitant gasoline taxes and pay an additional "toll fee" for the privilege of driving on a highway for which his tax dollars should have already paid.
Abuse of the consumer doesn't stop there. Toll roads are profitable because the operators not only get the toll fees, they get revenue from the concession contracts as well. Concessionaires must raise their prices to cover the contract costs. They can because they have no competition in toll road corridors from other vendors. The toll road user must pay whatever the concessionaire charges for gasoline, food and whatever other services that may be available.
Traveling on a non-toll roadway, a consumer may choose from an incredible array of restaurants, service stations and other vendors, all eagerly competing for his business. On a toll road, the consumer is stuck with whatever food, gasoline and other services the toll operator chooses to make available. The vendors have no competition, and the price for goods and services is always higher on a toll road than on a non-toll road.
Yet, politicians and economists hail this new form of infrastructure financing as a great example of free-market ingenuity. Nothing about the scheme is "free market."
In the first instance, the land on which a road is to be constructed requires the eminent domain power of government. Free market entrepreneurs would have little hope of acquiring sufficient right of way without the power of eminent domain. Very few functions in society can be performed better by government than by a free market; highways is one of those functions.
If gasoline taxes are not sufficient to provide the roadways required, they can be raised. The consumers, who are the taxpayers, can control the quality of their highway system by allowing, or not allowing, an increase in the gasoline tax.
Should a special roadway become necessary, such as the proposed Trans-Texas Corridor project, which requires more funding than current taxes allow and which will benefit a narrow, definable consumer group, government could obtain the funding through bond sales tied to the future toll revenues. This is essentially how the private sector raises the funds, by pledging future revenues. The difference is the profit taken by the private sector; this profit could stay in the pockets of the consumers if the project were constructed and operated by government officials. Moreover, the consumers might have some hope of oversight by elected representatives if the project were operated by the government.
When government turns over the right to operate a toll road to a private operator, the consumer is at the mercy of the contract agreed to by the initiating government and the operator. These agreements tend to be for many years, binding future generations.
The Trans-Texas Corridor agreement with Centra-Zachry lasts for 50 years. Centra, a Spanish company, partnered with an Australian firm in a 99-year contract to operate the Chicago Skyway, and a 75-year contract to operate the Indiana Tollway.
The users of these facilities will be paying handsome tolls, premium prices for food and services, in addition to the exorbitant gasoline tax, for most of the rest of this century.
What makes this form of infrastructure financing so attractive to highway officials is the initial cash payment from the private-sector operator. The city of Chicago was paid $1.83 billion for the right to operate the Chicago Skyway. The Indiana Tollway deal produced $3.85 billion for state officials. And the Texas deal will produce a total of $7.2 billion for state officials.
This is just too much money – all at once – for government officials to resist. No, it will not be used to reduce gasoline taxes, or any other tax, for that matter. Government will simply find ways to watch it evaporate long before the contract expires. Government benefits from the cash windfall; the private operator and its financiers benefit from consumer revenues; and the consumer – the poor working stiff – gets to pay the bill.
Privatization bump
They left out the part about non-compete agreements with the state, that forbid the people to build a free road to compete with the toll road. After all, what idiot would pay money to drive on a road unless the alternative was inferior?
Did they also leave out the use of Eminent Domain to seize your land and property, for private use?
Why not sell the state capital and let the law makers lease their offices from the owner?
Sell the governor's mansion..and let him lease it back.
The idea of selling public assets conjures up visions of buying groceries with a credit card. Buying groceries with on credit is good for bridging small gaps, but is a bad tactic over the long term.
In my opinion high taxation along with high corruption is the reason New York has a negative population growth rate.
Tax rates aside, I wonder if society is going down the same road that gave rise to Amtrak.
Ping.
Trans-Texas Corridor PING!
Thanks for the ping.
BTTT
Put the decal gates from the Hatem Bridge on 95 ping!
Whirled Nut Daily
Make your case instead of merely tossing childish names.
I've probably posted 500 posts on various threads about this topic. Look them up.
thanks.
cintra, a spanish investment co., has a very negative record in canada and california.
I don't care if you have posted 50,000 times. You made a childish and immature slur, now back it up.
I assume you live upstate New York and I live and grew up on Long Island, but lived just outside Rochester. You are quite familiar with the NYS Thruway. The tolls are still there right? Wasn't the Thruway paid for already? Why is the thruway a federal interstate highway receiving federal funds? I have seen taxes implemented for good causes that were supposedly just temporary, but they were made permanent. The revenue collected from the tolls on the bridges and tunnels around New York City are treated and considered as a general tax.
You may not agree with all of the contributors of content to "World Net Daily" that does not justify your shot however. That is even especially important since a major contributor is Dr. Jerome Corsi.
My warning is that each issue may seem isolated, but that is rather rare. In my opinion Long Island is hopeless now after dying a death of a thousand cuts. Will the whipping boy be allowed to turn towards the rest of New York State?
You have it backasswards.
You have made a comment linking the TTC, NAU, death of the Constitution, and the BP agents trial.
You're the one that needs to be backing up your statement.
How so?
Trans-Texas Corridor- It's not about transportation . . . It's about revenue.
death of the Constitution and the NAU-Coming soon to U.S.: Mexican customs office
and: North American Union to Replace USA?
It has been asserted that the Trans-Texas Corridor is the first leg of a super-super highway planned to connect Mexico, the U.S. and Canada and the creation of a North American Union similar to the structure of the European Union. The lack of border enforcement and the unusual prosecution of those that do enforce it lends to that view. Why are the border guards in jail for shooting a drug dealer in the butt?
What disturbs me the most is that the NAU issue absolutely must be publicly debated.
That should keep you busy for a while, but any more research is your responsibility.
backasswards.(sic)? No, I don't think so.
Private owned tollroads on public lands and public owned sports stadiums for private businesses (that get to keep "naming rights" money (often enough to PAY for the stadium).
The public is being ripped off. Lobbyists do their job well.
Thanks for the ping!
A road (even a privately-operated tollroad), by definition, is not private use.
Looking for the silver lining in this cloud. At least the Federal government wouldn't be able to blackmail states to pass legislation that is beyond the scope of Federal power.
The PA Turnpike brought in over $1,000,000 per year per mile of road under their control, and STILL decided it had to raise its rates 40% across the board......
Those that think Toll Roads are some great panacea are in for a rude awakening.
Let me take a moment to show you how the mis-info works. Corsi wants you to believe that the KC Port will be a port of entry. This is false, port of entry is at the border.
He warns that there could be a Mexican customs official there. It is not certain that there will be, but if there were, how would that be threatening? If there were, his job would to screen/pre-inspect freight bound for Mexico. One of the goals is to certify as much freight as possible, in both directions, to expedite the border crossing process. There are already two fast lanes on the Texas border and one in New Mexico.
Having the ability to pre-inspect in KC will give a competitive edge to NASCO/I35 Corridor over the Ports to Plains Corridor. Shippers will choose I35 over Ports to Plains because they will have an shorter wait crossing the border.
You need to recognize that there is a lot of competition for the traffic because the traffic brings money.
I35 is competing with Ports to Plains and I69
Texas is competing with AZ and CA
Lazaro Cardenas is competing with Guaymas is competing with Punta Colomet
The KC Inland Port is competing with Tucson's Inland Port
Mexico is competing with Panama
Oh I guess all the private land to be seized for privately owned and managed rest area concessions is just a lie then.
The idea that the commission can seize private property and lease it back to the original owners is a good, American idea then.
bump.
Pretty hard to imagine a limited-access road with no rest areas, although I must admit that constructing a $20 billion multi-modal transportation project just so the government can swoop in and take Farmer Brown's land in order to build a Waffle House is a neat trick.
Really? I95 does have some rest areas for sure, but it has lots of private businesses along it too. Some of them are even advertised on blue signs.
I'm from the Midwest, and I am aware of no tollroad anywhere here that does not lease its concessions. I have no idea what you mean by "I95," is it a tollroad, or not?
Isn't a toll road, by definition, a monopoly? Is that legal?
>>Traveling on a non-toll roadway, a consumer may choose from an incredible array of restaurants, service stations and other vendors...<<
But on toll roads, you get McDonalds for the Kids and Denny's for the adults. What more could you want?
I95, Interstate 95. Yes portions of it are toll roads. So is I87 and I90.
Ringa-linga-ling...Ping
Answer it dirnit!!!
You're welcome. :-)
". . .environmental, resource and cultural aspects. "The poor working stiff" will pay in many other ways than just money."
I don't follow you, please explain.
In 1996 the tolls were supposed to be removed off the thruway across NYState, at that point the legislature in dysfunctional Albany voted to keep them and it turned completely political. It was done of course to continue raping the taxpayers and continue to provide jobs for the union state employees, they get pensions and healthcare for life.
Their pension money goes into the huge pension fund we pay for. The same fund that lost millions of dollars in the stock market that we had to pay for yet again with increased taxes.
There is no temporary taxes in NY. They are addicted to the money, they will continue to spend all of it using our tax dollars to buy votes and influence in this state. Spitzer is in bed with all of them too. He and his liberal policies will continue to drive this state into bankruptcy.
Visit my daily blog. http://albanysinsanity.com/
I have run for office 3 different times and each time my own party, the republicans have fought to keep me out. Corruption is rampant in this state and I invite the feds to come in.
I co-founded http://www.freebuffalo.org/ ~ http://www.primarychallenge.org/ and helped lead the tax revolt we have started here in WNY. We have just now expanded to the edge of Niagara County near Rochestor.
We either fight, leave or die...
I like your choice of words. I have been saying that for years, not just about politicians, but about many people in general including stock holders. Money and the pursuit of it is just as addictive as drugs. Many of my family and friends had problems with addictions and a desire to understand them gave me a different perspective. The same 12-step concept used to treat alcoholism is also used in many other programs including narcotics, gambling and sex.
Thanks for the link to your blog. I will be there.
...the republicans have fought to keep me out.
I am not surprised, but I am saddened. Here, downstate I would never have known the Spitzer had an opponent if I had not heard John Faso on Larry Kudlow's radio show on Saturday. That is a disgrace, but again not surprising since they threw Rick Lazio under the bus.
Overall upstate New York State has gotten dumped on for decades. Growing up on Long Island gave me insight into the dishonesty in local politics, but living upstate after high school enhanced that greatly.
My hope is to share some of this so the rest of the country can see past missteps and honestly debate it, it that's even possible.
We will continue to fight and attempt to educate the apathetic people.
I will run again this year for county legislature and this time I will win.
Faso is a good guy we have talked many times, he would have done a good job I think, but who do you trust anymore.....
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