Should Ohio privatize the turnpike?
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IggyPride00
Governor Kasich is close to announcing a new plan to sell the turnpike to a private company in exchange for money to use for upgrading our state's infrastructure.
How does everyone feel about it?
Personally, I am loathe to the idea because it will turnout just like it has for every other state that has done it. Tolls will increase significantly, and the quality of the roads will decrease.
In the article Kasich said he doesn't want to just raise tolls because it will decrease the value of the turnpike and people don't like increases.
A private company though will raise them much more than the state would, and they will do it continuously because they have shareholders to be accountable to and our turnpike is just an asset to maximize profit off of. That is how this always turns out.
Chicago leased their parking meters in a similar scheme to raise money, and all it has led to is wild price hikes.
Nothing good comes out of selling roads if the goal is to keep toll prices under control.
Politicians have the limiting factor of being thrown out of office if they get crazy razing prices. A private company has no such issue to deal with, and in turn has no problems continually jacking up rates.
I am usually a free market guy, but in instances like this where it deals with a piece of public property like this not at all. Government is supposed to fix roads, it is one of the few things they do that is not out of the bounds of what they were designed to do.
http://www.dispatch.com/content/stories/local/2012/10/05/kasich-closer-to-turnpike-lease.html -
IggyPride00
If we know a private company will come in and jack up the prices, why doesn't the state just do it so at least we are keeping the money? I guess that is what I don't understand.Con_Alma;1291765 wrote:What makes you believe that's the goal?
My understanding that the goal in selling assets is to raise capital for the State coffers.
What the roads are leased for is a drop in the bucket compared to the profit that will be made on them over time. Why give that away for a quick score? -
Con_Alma
Large influx of cash. The only way to get it is sell it. I am not suggesting I support this but all accounts I have heard were to raise cash not cash flow.IggyPride00;1291790 wrote:If we know a private company will come in and jack up the prices, why doesn't the state just do it so at least we are keeping the money? I guess that is what I don't understand.
What the roads are leased for is a drop in the bucket compared to the profit that will be made on them over time. Why give that away for a quick score? -
queencitybuckeyeSacrificing the long-term for short-term gain is rarely a prudent business decision.
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Con_Alma
That's exactly the issue with politics today.queencitybuckeye;1291812 wrote:Sacrificing the long-term for short-term gain is rarely a prudent business decision. -
queencitybuckeye
True, their vision goes as far as the next election cycle. Easier than real work, I suppose.Con_Alma;1291822 wrote:That's exactly the issue with politics today. -
FatHobbit
queencitybuckeye;1291812 wrote:Sacrificing the long-term for short-term gain is rarely a prudent business decision.
yes to bothCon_Alma;1291822 wrote:That's exactly the issue with politics today. -
jmogI have an honest question, as a whole, if we look at the turnpike by itself. Is the turnpike losing money for the state. In other words are they paying more money in toll booth operators salaray/benefits and up keep of the turnpike than they are bringing into the coffers in tolls?
If they are losing money then I say sell it, if they are making money then I say keep it but raise the tolls slightly.
I know it is not that simple, but it should be extremely difficult either, make sure whatever company takes over is responsible for all up keep with some set standards, and they pay the toll booth operators salary/benefits. -
Con_Alma
Why raise tolls if they are making money? It shouldn't be used as a tax for the general fund in my opinion.jmog;1291852 wrote:...
If they are losing money then I say sell it, if they are making money then I say keep it but raise the tolls slightly.
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in addition, there is a point of diminishing returns. I remember a truck boycott of the turnpike due to tolls. The turnpike isn't the only way across the northern part of the State. -
Con_Alma
http://www.ohioturnpike.org/media/pdf/2011CAFRFINAL_small.pdfjmog;1291852 wrote:I have an honest question, as a whole, if we look at the turnpike by itself. Is the turnpike losing money for the state. ...
Page 48
They make plenty of money above expenses. -
jmog
Then keep it, and my above comment was to raise slightly to pay 3rd shift overtime when they do construction, I'm tired of driving in single lanes during the day on the turnpikeCon_Alma;1291857 wrote:http://www.ohioturnpike.org/media/pdf/2011CAFRFINAL_small.pdf
Page 48
They make plenty of money above expenses.
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Belly35
Here a better idea.
Keep the Turnpike State Owned and open up more area at the Service Center for addition Better Restaurants (Bob Evans, Pancake House as examples) and Hotels Accommodations. This will generate quick income for the land leasing and generate additional income long term and create jobs. -
gutIt all depends on the price they can get. There is a price that represents fair value for the future revenues less expenses. It's really just that "simple", not to mention the savings of all those salaries and pensions (which, incidentally, is why this can sometimes work for all parties involved).
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BigdoggThe private companys can run the state parks better also, but should they and at what costs? We should open up the Kasich thread again. Old Johhny boy still putting the screws to all the blind sheep.