For months, heck, maybe even a year, Ohio Gov. John Kasich has been pushing the privatization of the Ohio Turnpike. Kasich was in love with the idea, often showing a public display of affection. He gushed that it was the only solution for a state facing a weakening transportation budget. Then, suddenly, the kissing stopped. There was somebody—or in this case something—else. Last week, the Ohio Department of Transportation announced that instead of getting involved in a public-private partnership it will use bonds to pay for needed maintenance over the next few years. Ah, bonds. Much like Fabio still melts the hearts of 50-year-old women, this abused form of borrowing still lights up the eyes of state transportation agencies nationwide. Why work diligently toward a more feasible solution when you can just sit back and run the taxpayer's credit card?
Here is my issue with leaning on bonds: What if toll revenues continue to decline? How are you going to pay off those said bonds? If the economy continues to poke along, and it very well could for the next couple of years, motorists will think twice—OK, maybe only once—before they spill the contents of their wallets into a toll basket.
Yet, members of the business community in Ohio applauded the move:
“I did speak to the governor yesterday and I did say to him that his is the best outcome around a very anxious decision he that had to make," said Cleveland Mayor Frank Jackson. "And a very potentially controversial decision around the turnpike. What he has done in his conclusion really gives us the resources we need to invest in the infrastructure of the turnpike to insure its life. It gives us the ability not only to retain jobs, but to create additional jobs. So I think it’s a good decision, good process, good outcome, good decision, good for Cleveland, good for northeastern Ohio.”
“It doesn’t just make sense, it makes perfect sense," said Rep. Bill Patmon, "that we are now going to pay for our deficit in infrastructure using tolls, not taxes. You can’t beat it, it makes perfect sense and for that I back this governor on this project."
Yeah, just a point of clarification, Mr. Patmon: Tolls are considered user fees--not taxes. Of course, your failure to acknowledge this is the reason those at the state and federal level refuse to increase the gas tax. The fact it is labeled a tax destroys the true meaning behind it.
So I wonder what will happen if toll revenues indeed go down, and the state of Ohio cannot pay back these lovable bonds. My guess is they will raise the toll--er tax. What looks lovely today could look horrid tomorrow. With the way the world is turning these days, this type of scenario could indeed play out. What's not to love? Plenty.