Under the Democrat's plan, the state would sell an additional $1.6 billion in bonds to accomplish two goals:
- Using the revenue generated from the toll increases already announced by the Daniels Administration to float $800 million in bonds over the next 20 years. The governor has proposed doubling toll rates, which would generate $160 million a year.
- Using Garvee Bonds, a process by which the state can borrow against future federal gasoline revenue, Indiana can generate another $800 million over the next 20 years.
“All of this can be done without the risky business that is so much a part of the governor’s plan,” Bauer said. “Under the House Democrat proposal, there would be no worries about foreign control of public assets, non-compete clauses, private taxation, unfair toll increases or increased liability for Hoosiers if the foreign investor defaults.”
A major complaint of the Democrats is that under Gov. Daniels' plan to privatize the toll road the profits earned by the foreign-controlled entity will leave Indiana rather than being re-invested here. By Bauer's calculation, the private contractor will have recouped its initial $3.8 billion purchase price for the lease after the first 17 years of the 75-year lease. Bauer said, "Under the terms of a 75-year lease proposed by the administration, every nickel generated by those toll increases over nearly 58 years would go into the pockets of foreign investors. That means about $21 billion in profit will be leaving Indiana.”
Bauer omits the fact that the private contractor, in addition to the $3.8 billion purchase price, will be required to invest an additional $4.4 billion in toll road improvements over the life of the lease, which would have otherwise been paid by the taxpayers, in addition to bearing the costs of maintaining and operating the toll roads, a cost otherwise borne by the taxpayers. Bauer also complains that toll road increases will wind up in the pocket of foreign investors, but he fails to mention that two-thirds of the toll revenues are generated from out-of-state auto and truck tolls.
While Gov. Daniels' provided detailed information about the road programs which his plan would fund, the Democrats offered no concrete information. That's because their program would not fund all of the projects the Governor's plan will allow us to undertake over the next 10 years, including the much-needed I-69 project, the I-31 upgrade and the Ohio River bridges.
As we recall, Democrat politicos enjoyed quite a bit of graft and skimming from operating the Indiana Toll Road during the 16 years the Democrats controlled the Governor's office. If we're not mistaken, a few of them went to jail for their misdeeds. So when Bauer talks about the "risky business" of operating the toll road, he should explain that there are plenty of risks associated with entrusting the toll road's operation to the politicians as well.
It is refreshing to see the Democrats offer an alternative to the Governor's proposal rather than just taking the old slash and burn approach. But when you compare the $3.8 billion in hand the Governor's plan promises versus the $1.6 billion in new credit card charges the Democrats' plan promises, it's hard to walk away from the Governor's plan.