U.S. Drivers Will Pay Highway Tolls To Foreign Firms
Across the nation, states are leasing toll roads to private investors, including many foreign firms.
"...money from federal and state gasoline taxes that pay for roads are falling further behind the need, with no political appetite in an era of record gas prices to increase the rates. According to U.S. projections, the part of the federal Highway Trust Fund devoted to roads is to run out of money for the first time in its history in 2009."
Due to limited federal and state funding, states like New Jersey and New York are considering leasing their toll roads. Illinois and Virginia have already struck deals with private firms to operate certain toll roads. At the end of this month, the Indiana Toll Road will be leased to an Australian and Spanish team at a price of $3.8 billion to the state of Indiana. The money will pay for transportation projects across the state.
Governor Mitchell Daniels, architect of the deal, says: "We can stop dreaming and start digging all these big projects." However, some Indiana residents worry about foreign control, loss of jobs for local toll booth operators, and increasing tolls.
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Private toll roads not necessarily a panacea
It is so annoying when xenophobic issues cloud debate over such serious problems. The entire US economy is already mortgated to the rest of the world! Who do you think 'owns' the debt that all of you generate? But I digress....
The idea that privatizing roads is going to be some magic source of infrastructure funding for governments is very short-sighted. Private companies get into a business in order to make a profit. If a road is losing money now, why would a private toll operator expect to do any better? Sure they can raise tolls (unless the government restricts this option, which may well be the case), but then the number of users will go down! I am willing to bet that the government had to offer certain incentives to the private operators in order to "encourage" them to take on the project! There are a limited number of "choice" toll road facilities which private toll operators are willing to invest in. The vast majority of facilties which governments want to "privatize" are not obviously profitable, so various incentives and supports are necessary to encourage the private sector to assume the investment risk. Is this really privatization?
Normally an independent limited risk company is created to operate a privatized facility. And what happens if they don't make enough money? They go bust, and the private investors may lose some money! But will the government let them just close down the road? I seriously doubt it. So once again the government may find itself in a position where it needs to assume certain debts in order to provide a service....
Americans don't like to pay taxes (who does?), and it is very convenient for politicians to get elected by promising tax cuts. Reduced government revenues leads to reduced government services - services such as road and infrastructure maintenance. Various government levels have been downloading services for years now (federal to states, states to municipalities, etc.), and now the services are being downloaded onto the private citizen! Until Americans start appreciating that they need to pay taxes (or tolls) in order to maintain their quality of life, this kind of debacle will go on again and again and again.