59°Gov. Kasich mulls leasing turnpike to private company
Mar 20
2011
(UPDATED AT 9:30 A.M.) Ever since it opened in 1955, the Ohio Turnpike has been run by the state.
Gov. John Kasich, however, is thinking about offering a private company a long-term lease to run the turnpike, likely allowing the company to profit off the endeavor.
The governor didn't propose the idea when he released his budget plan Tuesday, surprising many observers.
But don't rule it out.
The governor's spokesman confirmed the plan to lease the turnpike is still on the table.
The governor's decision to exclude the plan from the 2012-13 budget proposal shouldn't be taken to mean he'll wait until 2013, when it's time to propose another two-year budget, said Rob Nichols, Kasich's spokesman.
"The turnpike could be brought up at any point in time and not necessarily in conjunction with the budget," Nichols said.
If the turnpike is leased, any money a private company pays the state for the lease would be used to improve the state's transportation system, said Melissa Ayers, a spokeswoman for the Ohio Department of Transportation.
If Kasich leases the turnpike, he'll be following in the footsteps of Mitch Daniels, Indiana's Republican governor.
If Indiana is any indication, a successful leasing program could generate plenty of money to spend on other road projects -- although it'll be motorists who foot the bill.
Daniels, touted as a possible Republican candidate for president in 2012, pushed through a plan to lease his state's turnpike shortly after winning election in 2004. Within two years, a private company began operating the turnpike under a 75-year lease.
The company paid the state a onetime payment of $3.85 billion.
In 2008, the cost to drive the 157-mile Indiana turnpike -- for drivers paying cash -- jumped from $4.65 to $8. Tolls went up again in 2010.
So far, officials representing Erie County's tourist industry haven't voiced any strong opinions about Kasich's proposal.
Joan Van Offeren, executive director of Lake Erie Shores & Island East, said her board hasn't discussed the issue, and Larry Fletcher, Van Offeren's counterpart at Lake Erie Shores & Islands West in Ottawa County, hasn't discussed it, either.
Van Offeren said she isn't worried hikes in turnpike tolls would affect tourism.
If the turnpike began charging "ridiculous amounts" for travel, "tourists and the rest of us will find another way," Van Offeren said.
Robin Innes, a Cedar Point spokesman, also said he's unaware of anyone at the amusement park discussing the issue.
"We would not like to see a huge increase in tolls," Innes said. "Certainly we think it's better for business and people traveling to make it as inexpensive as possible."
Still, a reliable transportation infrastructure is a priority.
"We want to make sure that the roadways are maintained and are safe and it's easy for our guests to get where they are going," Innes said.
Peter Zaehringer, executive director of the Erie County Economic Development Corporation, takes the turnpike to work every day. He lives near Akron but works in downtown Sandusky.
Zaehringer said he'd prefer not to see tolls increase, but he knows the state has big budget problems to overcome.
If state leaders are torn between heavy cuts in education spending and altering operations at the turnpike, Zaehringer said he'd prefer to sacrifice the turnpike.
A possible lease of Ohio's turnpike has been discussed for years.
In 2006, the previous Republican candidate for governor, Ken Blackwell, proposed leasing the turnpike for 99 years, suggesting the move could generate $4 billion to $6 billion for economic development.
The proposal died when Blackwell lost to Ted Strickland, the Democratic candidate.
A 2006 analysis written by David A. Ellis, of the Center for Community Solutions, and Ned Hill, vice president for economic development at Cleveland State University, suggested that leasing the turnpike would bring in less than $2 billion.
Ellis and Hill said Ohio's turnpike has been operated efficiently and has been able to raise tolls as needed.
"If the turnpike is well-run, a private vendor will have difficulty squeezing a profit out of the lease, unless the company sees an opportunity to charge monopoly rents through ever-increasing tolls," their analysis stated. "The only reason to lease the asset, given our analysis, is an ideological drive to shrink the size of government."
A 2008 article by Leonard Gilroy, director of government reform for the Reason Foundation, argued the turnpike lease has been good for Indiana.
As a result of the lease, "annual state highway spending will quadruple from $213 million in 2006 to $874 million in 2015, and every county in the state has or will receive additional funds for local transportation projects," Gilroy wrote.
Gilroy's article also said interest earned on the $3.85 billion payment has generated more than $360 million so far, providing more money for transportation projects.
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10:26 PM
ttwks says
Cast the First Stone
So just where do you get your info from ? My husband works for the turnpike and has none of these benefits you are talking about . Check your facts
06:37 PM
makewal says
LISTEN UP FELLOW CONSERVATIVES, DON"T LEASE THE TURNPIKE!!! What happened to the lost art of paying for things rather than refinancing them endlessly. In 1949 the plan approved by voters was to create a turnpike commission funded through bonds. Revenue from tolls collected then pain down to eventually pay off the bonds. Once that occurs, the road would become part of the Federal interstate highway system and the tolls will be removed and use would be toll free as I-75or I-71 etc., since funding would come in large part from Federal Highway system funds. This sounds like a much better deal than having essentially owned by foreign parties who profit from motorits who are already paying gasoline taxes for the roadway.
07:28 AM
CAST THE FIRST STONE says
Lease it......Tired of driving by 6 trucks by 6 potholes with 6 guys sitting in the truck. I drive the turnpike 5 days a week and it is a joke. A private company will figure out a way to close one lane at a time instead of making 3 lanes go to one lane for repairs. It is not worth taking anymore it is faster on alternate routes. So leasing it might save it. I know people that work there and it is the old boy network of don't go too fast we will get done too soon. Do you know they get 45 minutes at the end of the day just to clean their hands and wash up, and also have a 1/2 hr to drive to wash up. PRIVATE company would fix that
07:27 PM
Doody says
sorry I'm a little late to this conversation
06:32 PM
Doody says
This is a tough debate. Who would do a better job of keeping costs down? Historically that has been private companies. However, they have been known to do this by cutting standards. The bottom line is...the bottom line. Perhaps the state just doesn't have the money to keep paying all these employees. We're losing people in Ohio. Income and tax revenues are down. We can't keep spending when there isn't any money. Kasich, IMHO is in a lose-lose situation.
Still, I'm not sure it should cost me $7 round trip to drive myself to Akron with gas being nearly $4/gal. That seems kinda high when there's so many others driving the same road.
I guess I want to know more about why. See studies on how this has worked or hasn't worked in other states. Does anyone have those?
09:57 PM
FST says
This Gov. has to be the stupidest guy YOU have ever elected into office. So we let him sell off "OUR" states assets. After "some" debts are paid, what do WE have then? NOTHING!!! Then where do we go for help? Yep, right back into Federal hands asking for a bailout,but they won`t have any money either because the Federal government also sold off "OUR" assets to pay debts THEY made helping OTHER countries. The American government is taking away everything from the American people saying there is no money to pay for them, BUT then they turn around and spend OUR tax dollars to help people in OTHER countries get proper health care. We pay taxes so our government can take proper care of US but they are using that money, OUR MONEY to support people in other countries.The NEW dictionary needs to show under the meaning of "treason" ..... What the US Government has done to the American people.
I served this country and almost lost my life for Her twice and I promise you that I didn`t do it so that our government could do what they are doing to our country and the American people. I would also venture to say that many of my fallen brothers are rolling over in their graves just knowing our government is more concerned in other nations well being than our own. God help us all if we allow this to continue the way it has been. God Bless the AMERICAN PEOPLE in their fight for survival.
07:57 PM
Captain Gutz says
Eriemom,
No, I'm saying Mr. Deering certainly had a say in where the turnpike was put BEFORE construction began.
Route 2 had large stretches that were not even limited access at the time of the turnpikes construction.
Look at the map, the turnpike hits Avery and turns north/northwest. After crossing Thomas Road it conveniently goes across Mr. Deerings land in a straight line before once again heading n/nw after crossing Patten Tract Road.
11:42 PM
cooper3046 says
Actually Hmm, the Turnpike can't turn a profit because it cannot legally turn a profit. That is why there are record amounts of new contstruction and rebuilding of the roadways on tap. The Turnpike is making a record profit and all the money goes back into the road.
Also, the workers are not state workers. If they were state workers, it would be impossible for 50% of them to not have access to any form of health insurance, as is the current case.
Employee costs at the Turnpike have dropped several years in a row. More money than ever is coming in. More projects are being undertaken than ever. And it all costs the state nothing. If the Ohio Turnpike had been on the same toll increase plan as the Chicago Skyway and the Indiana Toll Road (2%, Consumer Price Index % increase, or GDP % increase whichever is highest) since 1956, instead of a car paying $15 cash to cross the state, the toll would be $125.40.
People do not understand how quickly increases will shoot up over decades. Economic study predicts residents of Indiana will pay $120 billion in tolls for the $3.85 billion they got up front. Predicts car toll in the 75th year of their lease to be $1073, based on historic economic data.
Leasing the Ohio Turnpike is a bad deal for everyone in Northern Ohio.
11:00 AM
Kimo says
09:14 AM
eriemom says
Capt. Take a look at an Ohio map. Check out the dip and the location of Route 2. All you saying that Deering had enough influence to move pike construction?
07:29 AM
Captain Gutz says
Kimo,
Any idea how much Fred Deering made off the Ohio Turnpike? Ever notice how the Ohio Turnpike goes across Freds land instead of going straight across the county?
09:03 PM
Kimo says
Re: If it's so profitable why does the Governor want to lease it? Shouldn't we capitalize on what we own already?
You feel you are taxed enough already, but you have no problem sticking your mitts into my pocket for more of my money.
Taxed Enough Already = TEA
Keep your hand out of my pocket.
08:40 PM
Kimo says
A message for Kasich:
From those of us that use Ohio Turnpike and pay the tolls, "Keep your mitts out of our pockets".
08:33 PM
Kimo says
Re: State of Ohio can't turn a profit on the turnpike.
The "profit" in or on the Ohio Turnpike is: Drivers both private and commercial, have a well maintained road, that is safer in the winter because of their proactive snow and ice control.
That's a pretty good "profit" for the people that use that road, and pay the tolls.
And yes I'm one of those people that use the Pike and I appreciate the great job their employees do.
07:40 PM
Hmm says
I never said this was a positive thing - nor did I say it was a negative thing. I'm simply answering kelliandnates' question about why the State of Ohio can't turn a profit on the turnpike.
07:34 PM
Kimo says
Re: terrible condition
You are right on tk
Over on that Pike they need an "Adopt a Pothole" program.
07:03 PM
Kimo says
Re: It appears they keep all of the profit
A chunk of that profit goes for campaign contributions and will help them keep or gain another plum.
06:52 PM
Kimo says
06:25 PM
tk says
I know from experience that the Indiana Toll road has gotten to be in terrible condition since being leased to a private company. It appears they keep all of the profit and nothing goes back into maintance.
05:45 PM
Bess says
Humm -
I'm with Kimo!!!!
05:35 PM
kelliandnate says
Right on the money Kimo! @ Hmmm, the turnpike is self-sustaining. They don't rely on the state for any money. The employees salaries are paid for from tolls. Selling/Leasing...when you are talking about that much time it doesn't matter what you call it because we will never see it turned back over to us in our lifetime.
05:03 PM
Kimo says
Re: A private owner would expect the employees to pay a larger portion of their health insurance and retirement. They could more easily turn a profit.
The profit would go to some private company, workers would make less money, pay less taxes, have less disposable income, etc.....................
Kasich would take the "profit" and hire more of his buddies, from wall street............
If you think that is good business, you must be a teabager.
03:56 PM
Hmm says
kellyandnate - they aren't talking about SELLING it they are talking about LEASING it for money. And the reason they can't make money on it now is because it employs government workers. A private owner would expect the employees to pay a larger portion of their health insurance and retirement. They could more easily turn a profit.
03:49 PM
Kimo says
The Best road we have in the State.
Stands on it's own feet.
If it ain't broke, don't fool with it.
I use the turnpike on a regular basis.
Why would I want to pay higher tolls for a road that will go down hill in private hands?
Just another cheap shot at the unions.
03:48 PM
kelliandnate says
Only in America would we sell an asset that we don't pay anything to maintain. The turnpike is completely self sufficient. It is beyond me why we would even consider selling it. I mean if somebody else is willing to pay 3 billion for it because they know they can make a profit shouldn't we be keeping it? Our elected officials have absolutely no common sense. Maybe we could pawn Kasich off to China. What do you think they would be willing to pay for him and all his knowledge?
03:38 PM
Perkins2060 says
Sell it!
01:49 PM
Kimo says
Troller 1940: A person that uses a "trolling sinker" dragging along the bottom of a body of water to catch fish that feed along the bottom, sometimes called "bottom feeders"
Troller 2011: "Bottom feeders" that use a computer instead of a sinker.
::-)))
01:19 PM
goofus says
Bess Blog cop, just keep spreading the wealth of the hard working successful people to the great proletariat of the unwilling people who have no self worth. Please continue to have a bleeding heart for the people in jail that might get a reduced meal portion instead of the victims of their crimes who are dealing with the actions that the people did to them. I don't have to prove a thing to you blog cop Bess!!!
12:28 PM
Bess says
Goofus it seems from your note that you make yourself feel better by making statements that fit your position without regard for reality. What liberals "look at the clause to promote general welfare and construe it to mean everybody should be on welfare?" You may be free to state your opinion but expect to be challenged when you present your feelings as factual matter.
12:09 PM
Perkins2060 says
Left Wing Nuts
11:40 AM
goofus says
Someone must have been sniffing Fib-Rmat instead of testing it.
11:36 AM
kURTje says
Goof as one whose lineage IS from Nazi Germany I godda tell ya .....your stuff so ancient it is pathetic. Hope I did'nt knock off your Fez. Hast mich?
11:35 AM
goofus says
Why is it that liberals look at the clause to promote general welfare and construe it to mean everybody should be on welfare?
10:38 AM
Bess says
6079
First you cannot prove the future. As for “rumor mongering”, I would call it a warning. You seem sophisticated enough to know that palms are greased all the time. I don’t like it and believe it shouldn’t happen and accountability or watching for it is our only recourse. Your comment “Mr. Kasich’s assets are in a blind trust and that he’s unable to capitalize financially on his public actions” ignores all history and politics and I believe you know it.
Second, either you find the Monopoly argument “turgid and off point” or you want to argue about it’s simplicity as reflected in you very next statement: “So the State should control as many financial and physical property assets as possible and those that it cannot or refuses to control it should heavily regulate.” Perhaps you should read it again as I never suggested what you state. The state is to “promote the general welfare” of citizens.
Your proclivity to resort to calling all liberal policies either socialist or fascist will only impress others like you that want to believe it despite all evidence to the contrary.
As for your base question, there are multiple remedies and you should be aware of them, most obvious, end tax breaks, raise taxes, reduce some expense.
09:50 AM
bayshore says
Since the inception of the turnpike, northern Ohio has been raped by all who use the highway in the form of the tolls, that were supposed to end when paid off. Well, if the state needs more money then maybe it's time that the rest of the state enjoy the privilege of paying tolls on the interstates that pass through their area. I'm sure the residents of Columbus and Cincinnati will joyfully step up and join Easy Pass to speed their daily commutes as they contribute to the state's needs. The Governor doesn't need to sell off the turnpike, just add more toll roads.
09:39 AM
6079 Smith W says
07:56 AM
Bess says
6079: Let's play Monopoly. I'm the iron and I have to go around the board to collect my "salary" of $200. But, in order to achieve the salary I have to pay rent whenever I land on someone's property. There are locations where I have to pay taxes or assessments, and sometime's I may land on Chance or Community Chest. On the first go around I managed to purchase a few properties where I could be safe. As the game continues there are those who bargain for other property. Before the game ends the only "safe" location is jail where you don't have to move and risk losing everything. Of course in jail you cannot even earn the $200 salary.
The message is we should not bargain away our assets so others make it impossible for us to move and earn our meager salary.
Your wrote this is what "broke" people do so "like a broke family...". This is not only a bad metaphor it is bad policy. The State needs to hold onto these assets so my little iron can continue around the board.
07:22 AM
Bess says
Giving away Ohio assets - is this really why you eleected him? This is the most obvious transfer of wealth the only question is what is coming back to the governor? Sometime it pays to think about motive before electing someone.
Services cut but wait, Kasich pockets the money. So typical and so abhorrent.
03:04 AM
Don S says
Read The Late Great USA, by Jerome R. Corsi, PH.D. It tells about the NAFTA "Superhighway" that will go from Mexico through USA to Canada and financed and own by multinational corporations. Make the USA, Mexico, and Canada into the "North American Union" , like the "European Union". This is how corporations like unions.
02:01 AM
Don S says
The Indiana Turnpike is not what Ohio should use as a model for the future on Ohio's highways. I traveled the length on the Indiana Turnpike last summer. I traveled from Nevada to Ohio and the Indiana Turnpike was the worst road on the entire trip. I believe Indiana has not repaved thier turnpike in 20 years or more. The right lane was so bad, that I had to stay in the left lane to maintain control of my 5th wheel trailer. The truck ruts in the right lane were that bad. I would say that it is probably the worst interstate type road I have driven on. I bet Indiana never puts a penny, of it's tolls, back onto their turnpike. Having a private company run Ohio's turnpike would be a big mistake. If the state runs it, then the public will have a say in the control and maintenance of the road.
09:03 PM
kURTje says
Hey! Let's be like Henry Ford during the depression. Since America's economy was bad Henry went to Russia & had his Model-A made there. (GAZ) He also espoused capitalism too! Isn't history great? Sadly most would sell their soul to the Devil for the $$. Can only hope some foriegn outfit doesn't come looking.
08:25 PM
eriemom says
I used to believe that we had a Constitutional Republic and that our economic system was capitalism. It isn't anymore, the two have merged. Our government is Capitalism, and the Constitution is used as a Corporate Bill of Rights.
06:57 PM
pntbutterandjelly says
In a round about fashion and to some extent I agree with "stillfree" in so much as China is concerned. That is Communist China. Land of the not-so-free. Land of the supressed. Land of..........58,000 factories that used to be here in the U.S. Communism + Capitalisim = strange bed fellows. (This message was brought to you by YOUR American governement.) How can our "government" merely stand by and watch 10's of millions of American workers, and their families, suffer? Don't tell me how it's the "union's fault" (this country worked and worked well ever since the Great Depression) or the free handouts to the poor or Socil Security or Medicare or Medicade. This country was and could have continiued with prosperity for all.
I remember when the jobs and factories first started to leave the ol' Rust Belt for our southern states (even though everybody was making money). I remember then when the jobs and factories started leaving those southern states and went to Mexico (even though everybody was making money). Then I started to see the jobs and factories leaving and moving to China (and now the only ones making money are the factory owners and the Communist Chinesse.).
Now they want to break apart the last bastions of Unionised labor in the name of "saving money" when in actuality it will turn into more profits only for the Big Boys. Next they will go after Union pensions, then all pensions, then Social Security, then Medicare, then Medicade. At last "they will have nothing worthwhile to rape profit from and you and I will be sitting here holding an empty bag of promises.
Smile folks.....it could get worse (if you live long enough).
Ps. Back to my question of "How can our government merely stand by and watch...?" The real answer is, "Because we let them do it to us." "Because we haven't really challegened them to do better FOR US." "Because we are guillible, lazy and ignorant." Obviously....merely voting for our favorite politican/make believe caregiver hasn't gotten our pain and suffering across loud enough.
05:46 PM
Factitious says
Privatizing the Ohio Turnpike is not a very good idea.
The poorly-run Indiana Toll Road was leased, not sold. The big up-front payment by foreign investors make it a short-term band-aid for Indy finances and bad deal in the long run. The terms allow for generous toll increases, no assurance of improvements or even excellent maintenance, and the State must pay if they build competing highways, even if needed.
The Ohio Turnpike is one of the State's successes. Why break it? The wingnuts promote privatization by talking in circles. A short term cash fix won't solve the underlying budget problems, which have at their root the right-wings conspiracy to deconstruct the American Government. (Stalin must be doing a little happy-dance down there every time the right-wing hatches one of these schemes.)
05:09 PM
Taxed Enough Already says
If it's so profitable why does the Governor want to lease it? Shouldn't we capitalize on what we own already?
04:46 PM
Centauri says
http://www.pewcenteronthestates.org/uploadedFiles/PA_Turnpike_FINAL_WEB.pdf Public-Private partnerships have been used around the world for years to underwrite infrastructure, but they have only recently gained a foothold in the United States.
04:46 PM
brutus smith says
Capitalists could care less about our country. Wherever they can make a quick buck, even if it means the downfall of our country, they will do it. Nothing, absolutely nothing is more important than the almighty dollar to these people.
04:41 PM
brutus smith says
Gee, I wonder why foreigners have money? Oh, that's right, all of our manufacturing jobs are there. Ahhh yes, Capitalism.
03:59 PM
6079 Smith W says
Will anyone want to buy the OH Turnpike - that's the question.
03:36 PM
stillfree says
I'm all for private enterprize as long as its an american company. I hear the Indiana pike is ran by the French. We can not sale or lease property that is essential to the american people to foriegn interest. It is a known fact that China has built up its military to enormous size, but Toledo has sold off prime waterfront property to them. No waterfront property can be privately owned in China. That is their way of protecting their borders. China hates us, people. God forbid but who can gurantee they won't bring in drugs or weapons via Toledo. If its their property is Homeland Security going to watching it? Congress please assure us that American taxpayed property won't fall into the wrong hands.