Ohio Public Highways For Sale - Gov. Kasich mulls leasing turnpike to private company

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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Comment by ew_keane on April 6, 2011 at 1:13am

following Indiana lead?

too bad for Ohio

 

Comment by bys on April 6, 2011 at 12:28am
Will the highway patrol then be simply a security force for a private company?  Will they be able to create new violations?  Will they charge to go use the restroom or park at a rest area?

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