Tollway lease will be studied
Thursday, Jun 1, 2006 - Posted by Rich Miller
The idea keeps moving forward.
State lawmakers hired a financial consultant Wednesday to determine how much money could be raised by leasing all or part of the Illinois tollway, but the elected officials steered clear of discussing how to spend the potential windfall.
Credit Suisse Group will be paid $30,000 to estimate the value of a tollway lease under various scenarios. Factors include how often tolls may be raised and how many years private operators would be allowed to cash in on anticipated increases in tollway traffic before the publicly owned road system reverts back to state control.
Officials advising Gov. Rod Blagojevich, who says he is considering the merits of privatizing the tollway, estimate a lease deal could generate at least $15 billion for the state. It would mark the largest privatization of public infrastructure in Illinois history. […]
“Governments that sign long-term concession agreements. … without retaining an ongoing interest in those assets risk being perceived as the equivalent of the Native Americans who sold Manhattan Island to Peter Minuit for $24 in beads and trinkets,” said John Adler, director of private equity at the Service Employees International Union. “When the deal took place, the Indians couldn’t believe the riches they had acquired from the foolish Dutchman. But since then, the perception of who got the better end of that bargain has changed considerably.”
Meanwhile, state Sens. Peter Roskam and Kirk Dillard are not happy with the way things are going. From a press release:
Sixth Congressional District Candidate Senator Peter Roskam and State Senator Kirk Dillard are calling for hearings to be held in the suburban communities who drive on the tollway and pay for the tollway. Recently, City Democrats have scheduled public hearings to discuss this proposal, but have excluded the two largest users - DuPage County and Suburban Cook County. More than 42% of the tollway runs through both counties covering more than 115 miles. On May 15th, Senators Roskam and Dillard alerted suburban communities and taxpayers of another Blagojevich scheme to lease the tollway for short-term political gain.
“It is irresponsible to specifically exclude DuPage County and suburban Cook County from this process. Suburban communities and taxpayers pay the tolls and use the toll roads. In fact, we already pay too much in tolls and another leasing scheme could force suburban motorists to pay twice as much. I believe suburban communities should have more input than less,†said Roskam.
“It is clear that Governor Blagojevich and City Democrats are trying to hide from suburban communities and residents with specifically avoiding input from those who pay and use the tollway,†said Senator Kirk Dillard.
Roskam and Dillard pointed out similar leasing efforts have led to higher tolls for taxpayers and no real benefit to suburban communities. On May 24th, a Congressional hearing before the House Transportation Committee heard testimony from experts who indicated similar concerns over leasing public highways. “Tolls paid by Skyway users will more than double by 2018 and be ‘significantly higher’ than otherwise, and the congested region will not even stand to benefit from lease proceeds, as no money was set aside for transportation projects, “ John Foote, Senior Fellow at Harvard’s Kennedy School of Government.
- Leroy - Thursday, Jun 1, 06 @ 6:15 am:
We just need to do the Springfield Switcheroo here…
Tell the suburbs they will get all the money from the tollway lease.
After the lease goes into effect, cut the normal annual expenditures from Springfield by the same amount.
Bingo! Problem solved.
- Leroy - Thursday, Jun 1, 06 @ 6:19 am:
BTW - The only good thing I see about privatizing the toll way is that the toll collectors who make $20+/hr, plus benefits, plus pension, for taking in a dollar bill in and giving two dimes back are probably going to be slaughtered.
- DOWNSTATE - Thursday, Jun 1, 06 @ 7:39 am:
Is it possible that this was plan A and the lottery was a divirsion to sneak it in.
- Sen. Jeff Schoenberg - Thursday, Jun 1, 06 @ 8:52 am:
Downstate - No, that’s not the case. As the Trib story points out, I’ve been moving on a deliberate and independent track in exploring this idea on the legislative level for several months. And because a public-private partnership involving the tollway could potentially be the largest public transaction in state history, we’re going to have a very exhaustive and transparent public debate over whether this works for Illinois taxpayers. I’ve already slated four hearings statewide and expect I’ll be adding more as Senate colleagues from either party request them.
This process is considerably different from how the Chicago Skyway and Indiana Toll Road deals came down. In those instances, the investment firm advising those governments formulated proposals which were then put out to bid. It was only after a successful bidder was selected that the legislative branches and the taxpayers had the opportunity to weigh in. That’s not going to happen here as we explore whether the idea of having private investors invest in public infrastructure is a good one for Illinois taxpayers.
- Wheres the leadership??? - Thursday, Jun 1, 06 @ 9:22 am:
Senator, I am sorry but outsourcing state assets is not the answer. FIX the problems in the Tollway & Lottery, and cut the overhead. The only people who will benenfit from this (and the Lottery Deal) will be friends of the Governor who “Lobby” for the companies that eventually “win” the bid.
- TomD - Thursday, Jun 1, 06 @ 9:32 am:
One plus out of privatizing everything: in the long-run, there are fewer opportunities for political hiring scandals if programs are privately-operated. I’m not sure that such an advantage is enough to persuade me, but it is worth considering.
- NW burbs - Thursday, Jun 1, 06 @ 10:00 am:
Duckworth talks about making our communities more secure and Roskam’s out talking about … nothing of consequence for our nation.
Which one actually wants to be the US Representative for the 6th?
I agree any such lease programs need to be thoroughly and honestly debated and vetted before implementation… but surely Roskam ought to be looking to the future good of our country at this point rather than harping on diddlywack local goings-on.
PS — link to an article on Major Duckworth’s press conference regarding common sense and actually preventing another 9/11: http://snipurl.com/r7jv (Tribune, reg may be req)
(Crossposted at Illinois Review.)
- Uncle Stosh - Thursday, Jun 1, 06 @ 10:08 am:
NW Burbs - Your well thought out post, coupled by your tight logic, backed with generally accepted facts has conviced me to vote for Duckworth.
NOT!
How about staying with the topic at hand instead of spamming Rich’s board with your stupidity?
- VanillaMan - Thursday, Jun 1, 06 @ 10:10 am:
HEY We didn’t come here for Duckworth commercials! If she even knew where he district was, perhaps she would have an interest in this issue!
Stay on topic stupid!
- the Other Anonymous - Thursday, Jun 1, 06 @ 10:58 am:
Will there be anything left of the State of Illinois by the time this Governor is done?
I don’t believe that government does everything well, but I also don’t believe that private companies do everything well. There are certain public goods that — quite simply — should not be privatized. Roads are one such public good, because the ability to travel (crosstown or crosscountry) should be made available to everyone, not just those willing to pay a higher cost.
I like Sen. Schoenberg, but I strongly disagree with him on this issue. At least I trust that the Senator has good intentions. I can’t say that for the Governor, who is showing a disturbing tendency towards instant gratification at the cost of a secure future.
- NW burbs - Thursday, Jun 1, 06 @ 11:04 am:
Uncle Stosh and Vanilla — Roskam is part of the topic. A proposed tollway lease is also part of the topic.
Roskam is in a campaign for US Congress versus Major Duckworth… So just because her name isn’t mentioned we can’t discuss how Roskam’s press conference was simply political posturing which neglects the national issues facing the 6th?
Thanks for bringing the ’sleaze-factor’ into the thread with childish name calling…
- NW “Stupid Spammer” Burbs
- Pete Granata - Thursday, Jun 1, 06 @ 11:10 am:
Get big governnment out of our lives. Lease the tollways and let free markets determine the cost.
- NW burbs - Thursday, Jun 1, 06 @ 11:48 am:
Pete, Do what you suggest and watch tolls jump 500%… If it weren’t for tax investments those potholes would never get filled in.
Metra would love your idea — of course if Metra was also privatized those tickets would probably double, at least.
No such thing as a free lunch, or a free road for that matter.
- grand old partisan - Thursday, Jun 1, 06 @ 1:21 pm:
NW Burbs,
“surely Roskam ought to be looking to the future good of our country at this point rather than harping on diddlywack local goings-on.â€
Hmmm…..
Not sure what you mean, “at this point.†Is that the “point†where he is still the State Senator for the 48th District, which has a large stake in any discussion on Tollway policy?
And, was the Tollway a “diddlywack local going-on†when Duckworth issued a press release regarding her position in the privatization debate on May 17th?
Peter Roskam has decided that he can both continue to represent his constituents in the state senate and run for federal office at the same time. If you think that’s wrong, please direct me to your statements criticizing Barack Obama for continuing his work in the Legislature while campaigning for the U.S. Senate in 2004.
- NoGiftsPlease - Saturday, Jun 3, 06 @ 9:13 am:
Basically, we’re selling a private company the right to raise tolls because we don’t have the political will to do it ourself.
What about the planned north and south tollway extensions? What about cooperation with the public transportation agencies that now or will in the future operate in the tollway right-of-way?