10/11/2011US DOT Backs Off Public Funding for Toll Road Privatization
Ohio Democrats convince US Transportation Department to drop federal funds for Ohio Turnpike privatization planning.
A plan to spend $1.5 million in federal gas tax funding to help a private company purchase the Ohio Turnpike was torpedoed by a group of Democratic members of Congress from the Buckeye State. US Department of Transportation officials held a conference call Friday to let US Representatives Marcia Fudge, Marcy Kaptur, Dennis Kucinich, Tim Ryan Betty Sutton, and Senator Sherrod Brown know that the project had been shelved.
On October 4, the delegation had written Transportation Secretary Ray LaHood to complain that Ohio's State Planning and Research Program (SP&R) was using federal funds to hire a contractor to advise the state on selling the turnpike for $3 billion. The idea follows Indiana and Chicago, Illinois which leased their roads to foreign companies for 70 and 99 years in return for short-term cash that was used to cover budget deficits. The Ohio Turnpike was not built with and is not maintained by federal money.
Governor John Kasich (R) has taken on the turnpike as an example of massive government waste. One-third of the $187 million in annual revenue taken from drivers goes to pay for toll collection equipment, personnel and overhead. Last year, one unionized employee was paid $80,720 for the unskilled task of collecting change, and the average salary for toll booth workers was $52,000. Kasich believes the job would be better handled by a machine.
The congressmen are upset that members of Teamsters Union Local 436 would lose their well-paid positions. Nationally, the Teamsters have provided $27.6 million in campaign donations to Democrats since 1990.
"While the SP&R Program's guidelines are laid out in a way that should get the full value from these investment dollars, we have serious concerns that using federal funds to progress plans to sell off a state asset is far from the intended spirit of the program," the members wrote in their letter to LaHood. "Using these funds to advance a privatization plan that could potentially severely cost drivers via increased tolls, threaten the job security of over 1,000 Ohioans, and drive up costs for local governments through increased maintenance costs of local roads, is a questionable use of federal taxpayer dollars and exposes a loophole in the program guidelines."
Tolls on the Indiana Turnpike doubled since it was sold to a Spanish-Australian consortium in 2006. Chicago Skyway tolls increased five-fold and will jump ten-fold within the next five years.
"The Ohio Turnpike is a high quality road in good financial health, has bipartisan support to remain in its current form, and serves as a vital business asset to ship goods all across this country," said Ryan, who organized the opposition. "Any efforts to sell the Ohio Turnpike are misguided, and I plan to continue to fight to protect the Turnpike in the future."
Over the course of a 99-year lease, the Ohio Turnpike would generate $54 billion in revenue with an annual three-percent toll increase. When the turnpike was first built, it was supposed to be converted into a freeway once its debt was retired.