Wednesday, June 25, 2008

PA Turnpike should be government-run

Here's how I know that a lease deal for the PA Turnpike is bad: SPAM. The commercial entity (partially backed by Citigroup) that wishes to run the Turnpike send me a SPAM message this morning begging for my support. AFAIK, the deal has "bipartisan support" (Morning Call, June 6, 2008). So why do they need a SPAM campaign?

Here's why: it's a bad deal. (1) Businesses get into deals to make money. If they couldn't make money, they wouldn't be doing it. That is money that the Turnpike will collect that won't get spent on road maintenance for that or any other road. (2) Maintenance will decrease. Because they have an obligation to their shareholders to maximize profit, the interest in providing a good product is decreased. This is especially true in any industry with locked-in customers. Let's face it: anybody already paying tolls to drive on the turnpike is locked-in. If there were better alternatives, we'd use them. So the rates will increase and customer service (read: maintenance) will decrease. Sure, the state will create some oversight group within PennDOT, but why not just do the work themselves? (3) It's a lot of up-front money. Any time a businessman offers you more money than you could possibly imagine, it's because he knows something you don't. (4) The legislators supporting it are all doing it for local reasons. Those along I-80 know it'll mean no tolls up north. The southeastern guys are doing it for SEPTA. What about people in the area? What about interstate commerce? (5) The lease is too long. 75 years? Who knows what will happen by then. Maybe roads will be obsolete. Maybe a new form of transportation will need that space, but hey, these guys bought the right to run the Turnpike, so build it somewhere else.

Here's an alternative: simply legislate to siphon money off the PA Turnpike Commission for other road projects. That's effectively what they're doing anyway, but using a corporation to launder the money. Get a bond issue. If the tolls are that certain, that businesses offer up $12.8 billion, the government should be able to get a good rating on some bonds. Anything but giving our money to one Spanish and one New York mega-corporation.

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