Wednesday, April 12, 2006

Lawsuit Filed To Block Toll Road Lease

Before the ink on the Indiana Toll Road lease had dried, opponents of the deal filed a lawsuit in St. Joseph County Superior Court to block it. The South Bend Tribune writes:

A lawsuit filed Wednesday in St. Joseph County Superior Court in South Bend challenges the constitutionality of the state’s agreement to lease the Indiana Toll Road to a foreign consortium.The plaintiffs in the lawsuit, several individual residents and members of the non-profit group Citizens Action Coalition of Indiana, contend the agreement violates the Indiana Constitution because the proceeds from the lease will go toward road projects, not to pay off the public debt.

“We are not doing this for any political reasons; this is not about politics,” said Steve Bonney, a West Lafayette resident who is spearheading the lawsuit. “This is simply a matter of following the constitution for which our governor and all state officials and state legislators have taken an oath to uphold.”

The 75-year lease calls for the Indiana Finance Authority to hand over all operations and maintenance of the Toll Road to Cintra-Macquarie, a Spanish-Australian investment consortium, in exchange for $3.8 billion.

The provision of the Indiana Constitution relied upon in the lawsuit is Article 10, Section 2, which reads: "All the revenues derived from the sale of any of the public works belonging to the State, and from the net annual income thereof, and any surplus that may, at any time, remain in the Treasury, derived from taxation for general State purposes, after the payment of the ordinary expenses of the government, and of the interest on bonds of the State, other than Bank bonds; shall be annually applied, under the direction of the General Assembly, to the payment of the principal of the Public Debt."

The State argues that the constitutional restriction is inapplicable to the toll road lease because it is not entered into by the State, but rather a quasi-governmental authority with its separate authority to issue and assume debt. The State has relied upon the creation of quasi-governmental entities for decades to avoid the state debt limitations in Article 13 of the state constitution.

No comments: