Privatized Toll Roads Pushed by Republicans, Shifts Massive Future Costs to our Kids.

While the state ponders installing toll roads to support highway funding, there’s another problem brewing in conjunction with this Republican proposal.

Privatization efforts to lease our highways to investors, in exchange for a one-time payment to the state for that privilege, is turning out to be another Republican con job that future generations will pay dearly for.

In short: Republicans will look like heroes saving current taxpayers money, and adding billions to the state coffers. But wait-private investors will be allowed to increase tolls 2% to 3% a year, dramatically shifting the burden of highway funding to our kids, and their kids, while we get off scot-free.  

Makes all this talk about saddling our kids with crushing deficits and higher future taxes look like yet another phony issue. Check out this new analysis of Indiana’s privatized toll road deal:

Financial analysis of Indiana Toll Road lease finds its true costs shifted heavily to future generations-10/22/2012 TheNewspaper.com:

John Gilmour, a College of William and Mary professor, believes the toll road public-private partnerships currently in vogue among transportation bureaucrats may end up costing the public a great deal of money in the long run. makes the case in the journal Public Administration Review, using the Indiana Toll Road as an example.

In 2006, the road was leased for 75 years to Macquarie-Cintra, a consortium of Australian and Spanish tolling companies, in return for an up-front payment of $3.8 billion to the state government. At the time, Governor Mitch Daniels (R) hailed the project as innovative. Far from being innovative … no laws stop governments from borrowing and shifting the cost of repayment to future generations.

There is no end to the toll increases motorists will have to pay. Each year, the rate will jump two percent, the rate of GDP growth or the inflation rate -- whichever of the three is greatest. Gilmour calculated … "Even with a modest annual 3 percent toll increase, it is clear that the ITR lease represents a large intergenerational transfer. With larger toll increases, the imbalance over time is far worse" … the first 25 years (drivers) will pay between 4 and 13 percent of the costs of the road while those living in the final 25 years of the lease bear between 56 and 78 percent of the costs.

This is the accounting trick played by Republicans who can't seem to manage money if their lives depended on it. Either future generations will pay outrageous tolls, or they’ll be presented with a huge problem that if properly thought out, would never have been allowed to happen.

Gilmour wrote, "Viewed from the perspective of fairness to future generations, the Indiana Toll Road lease is insupportable... It is easy to see why current politicians view asset leases with up-front payments as wonderful, allowing them to spend today without raising taxes or appearing to incur debt. In short, the ITR lease is a great deal for current residents of Indiana, but it offers little to those who will live in Indiana in future decades."

What about all the Republican whining about leaving our kids with crushing future debt? I think we know the answer to that empty concern. 

Note: I support a toll at the state borders and a pass for Wisconsinites who work in nearby states.