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Monday, December 10, 2012

Ind. Gov't. - "New study casts doubt on fairness of Indiana Toll Road lease"

Tim Vandenack of The Elkhart Truth has this lengthy story today - it begins:

ELKHART — Sure, the state of Indiana got $3.8 billion by leasing management of the Indiana Toll Road to a private concessionaire.

That isn’t pocket change, and the funds have been put toward improvement of Indiana’s infrastructure per the state’s 10-year Major Moves road plan.

A public policy expert’s new review of the 2006 deal, though, casts doubt on whether the transaction is all it’s cracked up to be. Indeed, John Gilmour, a government professor at the College of William and Mary in Williamsburg, Va., says future generations of Hoosiers will be short-changed.

As he sees it, Indiana has essentially taken a lump sum payment here and now on the value of the toll road — akin to a home-equity loan — for short- and medium-term benefit. Down the road, in decades to come, he argues, Hoosiers of the future will pay the price for the 75-year deal in the form of lost toll road revenue that otherwise would have made its way into government coffers.

“These transactions have important consequences for intergenerational justice because they enrich current citizens and governments at the expense of future citizens and governments by transferring future revenue to current budgets,” Gilmour says in his report.

His analysis, more fodder for the debate over the 2006 deal, appears in the November/December issue of Public Administration Review, a journal put out by Indiana University’s School of Public and Environmental Affairs.

Indiana authorities came back, calling Gilmour’s article “flawed.” The response — prepared by Troy Woodruff, the Indiana Department of Transportation chief of staff — also appeared, in shortened version, in Public Administration Review.

Among other things, Woodruff writes, Gilmour doesn’t consider the value of some $4.4 billion in future maintenance and improvements to the toll road that will be the responsibility of the new toll road manager, the ITR Concession Co.

Here is the article from the Ind. Univ. Public Administration Review, titled "The Indiana Toll Road Lease as an Intergenerational Cash Transfer."

Posted by Marcia Oddi on December 10, 2012 11:17 AM
Posted to Indiana Government