| March 23, 2006 Governor Mitch Daniels INDOT Commissioner Thomas Sharp Indiana Finance Authority One North Capital, Suite 900 Indianapolis, IN 46204 dwu@gov.in.gov, jalvey@ifa.in.gov, indot@indot.state.in.us Governor Daniels, Thank you for this opportunity to submit my comments regarding Major Moves privatized tolling of certain state assets. You have here my comments by chapter in Microsoft word, with appendix items, a legal memorandum regarding the constitutional distribution of state asset income and the Reason Foundation Document, “Should States Sell Their Toll Roads?”, as PDF attachments. John Smith COUNT US! John Smith Director INDEX Letter to IFA, INDOT and Governor Daniels Title page Index Chapter 1 Introduction Chapter 2 IFA No longer relevant Chapter 3 The Indiana Constitution Chapter 4 The Toll Increase is Unfair & Excessive Chapter 5 This Tolling is untimely and ineffective governance Chapter 6 Guaranteed Profits Chapter 7 Contract Voidance Chapter 8 Odds and Ends Chapter 9 Reason’s Reasons Wrong Chapter 10 Right Reason Reasons, Ignored. Appendix 1. Memorandum: Article 10 section 2 of the Indiana Constitution requires that “the net annual income” from “public works belonging to the State” must be used to pay off the state’s “public debt”. Appendix 2. Reason Foundation Document: “Should States Sell Their Toll Roads?” COMMENTS OF JOHN SMITH COUNT US! CHAPTER 1 INTRODUCTION: These comments are as allowed and required for actions under consideration regarding the operations of the Indiana Toll Road and the involvements of the Indiana Finance Authority (IFA). Presentation of these comments to the IFA Board for their consideration, written and received before the 10 a.m., March 23, 2006 expected vote, was allowed on March 22, 2006 by IFA Council Jennifer Alvery. These comments are presented as persuasive and informative. It is the opinion of this public comment that the proposals before the IFA on March 23, 2006 should be returned to the legislature and governor as not applied for reasons. It is presented in this document many reasons to not approve and forward actions under consideration on March 23, 2006 by the IFA; fiscal good management, good government and legal. COMMENTS OF JOHN SMITH COUNT US! CHAPTER 2 IFA No Longer relevant Follows is the stated mission of the IFA: MISSION To oversee State debt issuance and provide efficient and effective financing solutions to facilitate state, local government, and business investment in Indiana. As today’s intended vote relates to the just passed Major Moves HB1008 as law it conflicts with the mission statement of the IFA: Because as a state asset is privatized either by sale or lease, the funds and or income from those assets must be directed by provision of the Indiana Constitution to the General Assembly for payment of public debt. Because Major Moves would direct otherwise, the IFA mission and legal direction of actions must dictate rejection of approval of the actions presented for a vote today as inappropriate and unworkable. Any reliance of the IFA on their mission of “overseeing debt issuance” must be only to forward all proceeds of income or sale from the leased or sold state asset to the General Assembly. Any other means and methods for the distribution of fund contemplated by Major Moves acts is outside the scope of the IFA. The scope of interest of the Major Moves Law must not be viewed in any way as an issuance of debt, but instead the opposite. COMMENTS OF JOHN SMITH COUNT US! CHAPTER 3 The Relevance of the Indiana Constitution, here is but one example. Article 10, Section 2 of the Indiana Constitution 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. At times, these comments rely on the unconstitutionality of the Major Moves as law. This Chapter serves only to point out that a legal memorandum on this particular point of constitutional conflict has been commissioned by interested Citizens of Indiana and it is attached as Appendix 1. Our focus on Article 10, Section 2: Stated in ordinary speech, the Constitution of Indiana was written after decades of poor transportation decisions rendered Indiana bankrupt. As responsible Hoosiers would do, the authors of our constitution attempted to draft a document that would attempt to pay off the debt of the time and assure a similar situation would never be allowed to occur in the future. Then, as assets were sold or leased, (both where the case of the day) they where ordered to go directly to the state general assembly and there to be sent directly to payment of public debt. The mood and the tone of the documents surrounding the drafting of the constitution are unusually clear! More recent tests and rulings further support our points. Still, the comments presented in this document are not singularly dependent on the relevance of the constitution. We present in this document many arguments of fact and logic that should turn back this mistake of “hardball” politics and this document should not be seen as solely dependent on a constitutional point made in this document. The funded constitutionality report in our appendix here is only one of a number of legality concerns identified by members of the public and legislature as “Major Moves” was developed in the February and March 2006, Indiana Legislative session. It should be assumed that challenges will be forthcoming. COMMENTS OF JOHN SMITH COUNT US! CHAPTER 4 The Proposed Toll Increase is Unfair and Excessive The Indiana Toll Road was promised to become a free road when it would be paid for by the collection of tolls. This in itself is less fair treatment for those who use this road, when compared to all other roads in the state that are taxpayer funded. In fact the fuel tax that all other roads in the state use to pay for the construction and maintenance, since the provisions of Federal Highway funding laws of ISTEA 1991, all come from taxes collected at Indiana gas pumps. Those using the Indiana Toll Road are paying for all the other roads of the state at the same rate as those using other roads in the state at any time Toll Road users power their vehicles across the Indiana Toll Road with fuel purchased in Indiana. For them, then, they are paying a ‘non-users-tax’ to the rest of the states roads. The toll is a second tax. The fuel tax provides benefits to roads not in use as the toll is seen as a user tax for the Indiana Toll Road, but not all of that money has gone to pay off the bonds and bring the promised free Interstate. As anyone in the state would and has complained, “The Indiana Toll Road is underperforming”, they should ask themselves, “Underperforming, compared to what other road in the state of Indiana?” The fuel taxes collected in Indiana go to INDOT and to FHWA and those funds are all directed to transportation, mitigation of transportation related functions and transportation administration. Acts of the state legislature and Congress provide repeated provisions in each bill that assure that fuel tax funds never revert to the General Fund of the state. Therefore all users of roads other than the Indiana Toll road in the state of Indiana are paying a true user tax when they buy their fuel in Indiana. Plainly stated gas tax goes to roads! Look at the economic development uses of the Indiana Toll Road Revenues over the years. Look at the fuel taxes paid by those vehicle miles traveled on the Indiana Toll road. Claims that the Indiana Toll Road is poorly managed by the state are not due to the inadequate payment of too small of tolls, but the vast array of distribution of funds by unfair and unjust taxation/ distribution and allocations. Now today, you are looking at a toll of passenger vehicles of 5.1¢ per mile. Convert that into a fuel tax. The fleet mileage MPG in Indiana is assumed at approximately 22MPG. For ease of calculation, assume a 20MPG car. The 5.1¢ toll is equal to a $1.00 per gallon gas tax for this vehicle. That is, if you go 20 miles on one gallon and each mile costs you 5¢, then that gallon was toll/taxed $1. That the cars of Indiana get better than 20MPG makes this tax equivalent even higher. Again for simplicity, imagine a car that gets 40MPG. Forty miles at 5¢ is equal to a $2.00 per gallon fuel tax for a vehicle on any other road in the state. It is reasonable to assume that the MPG for vehicles in Indiana will continue to increase. Therefore this toll/ tax (even if called a user fee) will be increasingly unfair relative to the cost for access to travel routed elsewhere in Indiana over time. One last point, remember that the Toll Road User is paying the fuel tax in addition to the Toll Tax. So in our examples above, the $1.00 tax is actually $1.364 and the $2.00 example would be $2.364 for the 40MPG and these comparisons are June 30, 2006 prices based on 5.1¢ per mile and 36.4¢ in state and federal gas tax at 18¢ and 18.4¢. COMMENTS OF JOHN SMITH COUNT US! CHAPTER 5 This Tolling Proposal is Untimely and Ineffective Governance Two parts: Why the fuel tax is superior. Why the toll tax, especially as propose today is inferior. Our use of fossil fuels and our vehicles are presenting a number of issues that are no longer controversial, but are now seen as issues in need of governance. Listed: Peak Oil, the diminishing reserves and increasing price per gallon based on supply and demand models. Air Quality. EPA air quality standards have increased as transportation related travel continues to increase. Global Warming. No longer questioned in scientific circles and the effect of heat emitted and other potential ozone related causes make cars more than the usual suspects of cause. USA Auto Industry competitiveness; our traditional USA auto industry is no longer competitive in our own country and is a non-starter in other economies. Road congestion and maintenance, despite more miles of roads, for many it seems we are loosing the battle. We list these here to give example of why the fuel tax is superior to a Toll tax, especially a per mile toll tax administered on a market economy model. Probably by accident the fuel tax provides market-based motivations that exactly coincide with the needs of society in addressing the issues listed above. A raise in the per gallon fuel tax: Lowers demand & preserves fuel by. 1. Drive less Improves air quality: fewer miles driven or less chemical conversion of fuel to travel results in fewer emissions and improved air quality. Global warming: Advantages are addressed by reducing demand for travel and by increasing the efficiency of vehicles unusually by reducing the calories expended to create the work of travel. Fewer calories converted from fuel to energy result in less heat and heat causing emissions per accumulative miles driven. USA automobiles are not marketable in other countries because essentially our vehicles run on a different fuel: The fuel in all but a few net oil-producing nations retails literally 300 to 400% higher than USA fuel prices. Increasing this nation’s fuel taxes will drive demand for higher MPG vehicles and this is the major missing component in USA world car manufacturing demand even if as labor rates would be competitive. Indiana has had a strong history of auto manufacturing; its return would be welcomed. Road congestion and maintenance, despite more miles of roads, to many it seems we are loosing the battle: Higher MPG vehicles tend to be lighter and smaller. Interstate highways are built to load bearing capacities for interstate trucking loads. Lighter vehicles do virtually no damage to these roads. Keeping interstates free of tolls prevents the market decision to avoid using these pieces of the transportation infrastructure. A more balanced usage based on availability will naturally occur. When we have established interstates, more cars and smaller cars on the interstates is preferable to more traffic directed by toll pricing to local roads. To the extent that they uses less space, smaller cars put less demand on the interstate system and are less infrastructure demanding and damaging in all locations, urban, rural or interstate. Chapter midpoint reflection and establishment of perspective: The reason that other nation’s fuel costs more is government policy. There fuel is taxed more heavily and that taxation provides other government funding that goes to general fund line items and to lowering burden for other taxation. Many nations use the fuel tax like we use our cigarette tax to modify behavior. The reasons that Tolling is inferior, especially privatized, market driven tolling. First, lets understand to basic ways that roads can be tolled: 1. Perpendicular to the road direction as in this case (5.1¢ per mile) The perpendicular per mile tolling under consideration and contractually required by 75-year contract is the worst possible governance of our roads to address the issues of our time and knowable future: A raise in the per mile toll tax will: Lower demand & preserves fuel by: Drive less: A less productive and less mobile social model/ lost mobility and lost transportation affordability/ productivity. (There is no motivation to increase fuel efficiency. Hummer or Hybrid, the toll tax is the same. ) Improves air quality: Fewer miles driven or less chemical conversion of fuel to travel results in fewer emissions and improved air quality, but this is only accomplished by the loss in mobility and productivity above. Global warming: Advantages might be addressed by fewer trips made, but again with reductions in mobility and productivity. USA automobiles are not marketable in other countries our autos are “gas hogs”. As mentioned above, tolling by the mile only makes this worse.Problems of Congestion are made worse by market driven tolling policies. Larger vehicles will be more prevalent as the fuel tax is supplemented by unfair taxation on the toll road users and those users will have disincentive to buy smaller vehicles requiring less infrastructure. Those avoiding tolls on local roads and highways will add to congestion, as the toll road is “comfortably” below its maximum capacity seeking instead the balance of maximize pricing for a “premium product.” Regarding the parallel lanes toll pricing: We will be brief in this discussion here, since it is not on the table, but we will point out that advocates of tolling might make the argument that parallel lane tolling can better address the social issues of today and identified for our foreseeable future. We might find agreement with this argument in a system of planned roads and lane tolling working together for social goals. Unfortunately we can not imagine a situation where the market / profit driven, subdivided, privatized competitive management of roads would ever develop a tolling system of costs that would aim for more lofty social goals. By accepting the terms of the 75-year Major Moves agreement, the IFA will have sealed away any chance of better management of this state asset and infrastructure for three generations. JUST SAY NO! COMMENTS OF JOHN SMITH COUNT US! CHAPTER 6 Guaranteed Profits and the Pitfalls of Contract agreement voidance. Among the most troubling issues of Major Moves and the “concession” contract: "MORAL OBLIGATION" Guaranteed profits. Roads and transportation improvements are seen as competing. From the major moves House Bill 1008 as law: > "Provides that, with the
approval of the budget director after review by the budget committee, a
public-private agreement may include a moral obligation of the state to
pay certain costs incurred under the agreement."
As used in The Indiana Toll Road agreement, provides a "moral obligation" * If any action the state would take would cause a lower profit to the privateer * And provides the basis for conditions we are held libel for repayment of all payments and costs to the Concessionaire. We-- the state of Indiana, are the IFA and the private toll road consortium is the Concessionaire: > "Concession Compensation"
means compensation payable by the IFA to the Concessionaire in order to
restore the Concessionaire to the same economic position the
Concessionaire would have enjoyed if such Compensation Event had not
occurred, which compensation shall equal to the sum of all
Losses”..."that are reasonably attributable to such Compensation Event
plus (ii) the losses of the Concessionaire's present and future Toll
Road Revenues that are reasonably attributable to such Compensation
Event."
The above quote is taken from page 4 of the Concession Agreement. As the needs and tastes of the world would change, we would be stuck making up the differences from historic performance and court settlements of the past. This is not the true economic market economy; this is Hoosier funded social welfare for a corporation not even owned primarily by citizens of the USA, much less the State of Indiana. We must say informally, but frankly… This stinks! COMMENTS OF JOHN SMITH COUNT US! CHAPTER 7 Contract Agreement Voidance There where frequent claims by the Daniels administration during the period of February/March 2006 Indiana Legislative session that if we were to ever not be happy with this concession agreement then we could walk away, keep the upfront lease money and pay nothing. That might be true in some cases, but surely not all. Given the likely challenges to Major Moves on legal and constitutional ground, it seems likely that the less favorable terms for voidance of this contract would likely be sought by the Privateers, Cintra and Macquarie. Below is reference to those sections of the concession agreement that would bring great hardship to the State of Indiana and thus to the IFA Mission and any who would wish a good financial future for our state. Ownership or our Interstate system: Read page 74, 75, 76 of the Indiana Toll Road Contract ("Concession Agreement") regards how difficult it might be to back out of this first agreement and the conditions when and how Indiana would have to pay the concessionaire back virtually all of the privateers historic investment and potentially projected future profits. It is far from "change our mind and keep all the money" as Daniels has explained. Miscalculation and ignoring facts now could result in unimagined calamity. COMMENTS OF JOHN SMITH COUNT US! CHAPTER 8 Our Rushed Information. We ran out of time, yet wished to make this available even if very rough in presentation, we believe the content valuable and our questions should have answers before a 75 year “Major Mistake” is made: COMMENT TO THE JUSTIFICATIONS FOR MAJOR MOVES, HB1008 PRIVATEER TOLL TAXATION OF INDIANA ROADS BY LONG TERM LEASING. AND THE EMERGENCY RULES. 1. From what is on the Major Moves website, there appears to be a SECOND public notice for the Elkhart public hearing on Wednesday. It appears that this second public notice would provide the public hearing with a SECOND major purpose -- public comment on the proposed "emergency rules" for the Toll Road Lease and Concession Agreement. These "emergency rules" are authorized by HB 1008. They would appear to say, generally, "The rules for the Toll Road project are whatever the Toll Road Lease and Concession Agreement (and any amendments thereto) say they are." This is outside the bounds of all principles of our written and applied governance. Said plainly this needs to go back to the drawing board. This portion of Major Moves is illegal and should render the law and the actions taken under the law null and void. Restitution by the state of Indiana for illegal actions resulting could be very damaging to the interests and economy of the state and her citizens. 2. Regarding: Sec. 3. (a) After the procedures required in this chapter have been completed, the department shall make a determination as to whether the successful offeror should be designated as the operator for the project and shall submit its decision to the governor and the budget committee. (b) After review of the department's determination by the budget committee, the governor may accept or reject the determination of the department. If the governor accepts the determination of the department, the governor shall designate the successful offeror as the operator for the project. The department shall publish notice of the designation of the operator one (1) time, in accordance with IC 5-3-1. (c) After the designation of the successful offeror as the operator for the project, the department may execute the public-private agreement. (d) An action to contest the validity of a public-private agreement entered into under this chapter may not be brought after the fifteenth day following the publication of the notice of the designation of the operator under the public-private agreement under subsection (b). Comment: A bill unconstitutional and/or illegal may not contain a functional legal clause limiting the state or publics right to challenge that document. What is unconstitutional, remains unconstitutional and illegal until such time as the constitution of the state or the federal governments would amend said constitutions. 3. The Crowe Chizek analysis (on the IFA website) shows that the net present value of the revenue stream projected by the state from the Toll Road over the next 75 years is less than half of the $3.85 billion that the Consortium has promised to pay. This means that the Consortium plans to generate at least twice as much revenue from the Toll Road as projected by the State. In addition, the Consortium plans to make a profit, on which it will have to pay taxes -- neither of which were part of the state's projections. So, realistically, the Consortium is planning on the Toll Road gemerating three to four times as much revenue as the state projected. How is the Consortium going to generate these additional revenues? Who is going to be paying for these additional revenues? How much profit is the Consortium going to make? Is this profit going to be reasonable in relation to risk being run? Is this just another sweetheart deal like the Lawrence Utilities scam where public assets are being privatized for private profit? Why should Toll Road users pay more than the reasonable cost of the service they are receiving? The Toll Road will be like a regulated utility. Its customers should not have to pay more than a just and reasonable rate for the service, i.e. cost of operation and maintenance plus a reasonable profit in relation to the risks being assumed by the investors. What would be the type of circumstances under which the state would incur a "moral obligation" to repay the $3.85 billion under the Lease and Concession Agreement? What conditions and how often would guaranteed profits from the Moral Obligation be applied. Would improving U.S. 12, 20 and/or 30 be such circumstances if it could be shown that traffic was diverted from the Toll Road as a result? How about the improvement of I-94? What about raising the gasoline tax? Could air quality standards or new modes of transportation or the use of electronic communication devices or even a shortened work week provide a required profit assurance be paid the privateer /a.k.a. concessionaire). Would the state find it less expensive to negotiate a fee from year to year as a make up for lost profits rather than to fight legal battles over these matters. Will our road system continue to function as a system with a road in competition with other roads and other means of accomplishing goals that might be accomplished in other ways and means? Is not competition between roads and our need as a society and individuals harmed more than it is served by allowing for a political lobby system to preserve the profit of a single section of road over the benefit of a system and governance seen as a whole? In a propertied society as Europeans brought to the Americas, the necessity What about the Road Fund? How is that going to work? Is the $3.85 billion going into the General Fund, or what? How is money going to be appropriated by the General Assembly from the $3.85 billion? This is a violation of the constitution; no money can be spent without an appropriation. Also, the specific terms and conditions of the Lease and Concession Agreement is criticized in comments, because those terms control over the Toll Road Rules as far as operation and maintenance standards are concerned. Will the actual contract with the Consortium be different from the blank contract on the website? How will it be different? Will there be another public hearing on the actual contract before it becomes final, or what? These details require public notification and comment in open meets. 4, Major Moves, HB1008 is without merit, or ability to be sufficiently corrected, because under the terms of the Indiana Constitutions, as outlined in our attached legal memorandum: The analysis, by the Indianapolis law firm Mullett, Polk & Associates, which concludes Major Moves violates Article 10 section 2 of the Indiana Constitution, which requires that “the net annual income” from “public works belonging to the State” must be used to pay off the state’s “public debt”. Major move has as it core function to distribute state asset produced income in methods not legal or constitutional to expenses not allowed. It appeared to us that the trail would start with Section 5 of Chapter 5 of Article 18.7: " Sec. 5. To the extent that the department receives any payment or compensation under the public-private agreement other than repayment of a loan or grant or reimbursement for services provided by the department to the operator, the payment or compensation shall be distributed at the direction of the department to the: (1) major moves construction fund established under IC 8-14-14; (2) department for deposit in the state highway fund established by IC 8-23-9-54; or (3) operator or the authority for debt reduction." It also appeared to me that the trail would continue to Section 5 of Chapter 14 of Article 14: "IC 8-14-14-5 Sec. 5. (a) The major moves construction fund is established for the purpose of: (1) funding projects under IC 8-15.7 or IC 8-15-3; (2) funding other projects in the department's transportation plan; and (3) funding distributions under sections 6 and 7 of this chapter. (b) The fund shall be administered by the department. (c) Notwithstanding IC 5-13, the treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as money is invested by the public employees' retirement fund under IC 5-10.3-5. However, the treasurer of state may not invest the money in the fund in equity securities. The treasurer of state may contract with investment management professionals, investment advisors, and legal counsel to assist in the investment of the fund and may pay the state expenses incurred under those contracts from the fund. Interest that accrues from these investments shall be deposited in the fund. (d) The fund consists of the following: (1) Distributions to the fund from the toll road fund under IC 8-15.5-11. (2) Distributions to the fund from the next generation trust fund under IC 8-14-15. (3) Appropriations to the fund. (4) Gifts, grants, loans, bond proceeds, and other money received for deposit in the fund. (5) Revenues arising from: (A) a tollway under IC 8-15-3 or IC 8-23-7-22; or (B) a toll road under IC 8-15-2 or IC 8-23-7-23; that the department designates as part of, and deposits in, the fund. (6) Payments made to the authority or the department from operators under IC 8-15.7. (7) Interest, premiums, or other earnings on the fund. (e) The fund is considered a trust fund for purposes of IC 4-9.1-1-7. Money may not be transferred, assigned, or otherwise removed from the fund by the state board of finance, the budget agency, or any other state agency. (f) Money in the fund at the end of a state fiscal year does not revert to the state general fund. (g) Money in the fund must be appropriated by the general assembly to be available for expenditure." These examples show the extent to which the Major Moves bill orders actions unconstitutional. This function is primary and essential to the purpose and function of the law so much so at to be without sufficient merit for corrections in part. Therefore the entire bill is null and void and without merit. If any portion of the bill would be found workable, any income from lease or sale would need to be sent directly to the legislature of the State of Indiana for distribution to the debt of the state of Indiana. The justification for the sale of the Indiana Toll Road is insufficient and incomplete. The governor of Indiana Mitch Daniels in several Indiana news stories published late 2004 and early 2005 have identified INDOT as the worst run branch of the Indiana Government in recent years. The survey of INDOT projects in the spring and summer of 2005 was so riddled with errors to be of questionable value, but even if not questioned in process and execution, the priority of projects and rating hierarchy do not justify the action of three generation leasing with significant risk of financial damage to the state and with significant guarantees of profitability that too could result in unwise and badly timed expense to the state in the long term expanse of an agreement before never tried. Singularly the I-69 project moved from a 25 year project to a 10 year project would consume 90% of the toll road funds if "completed" from Kentucky to Michigan, according to INDOT and FWHA corridor 18 study documents. This Highway study is currently one section of a 30 some section federally mandated study of Corridor 18, I-69. None of the sections have be sufficiently completed nation wide for construction, in fact in Indiana 2 of the 4 required studies have not yet been started. The section referred to as I-69 for the purposes of the Major Moves bill, known in the corridor 18 federal bill as SIU 3 is currently in the earliest stages of tier two of a single EIS process. Page one Chapter one of the Tier 1 FEIS for I-69, 3C, Evansville to Indianapolis said 'not feasible as a toll road'. http://deis.i69indyevn.org/FEIS/Vol1-FEIS/PDF/Chapter01.pdf Chapter 1 Project History and Background 1.1 Previous Studies .... The following points summarize key themes in these studies. * ...... * ...... * ...... * Some Previous proposals were studied as toll roads. These proposals were not recommended because the road would not be financially feasible as a toll road. "Toll feasibility" requires that traffic levels not only pay ongoing operating and maintenance costs, but that they also provide revenues sufficient for construction debt service. Being "toll feasible" requires higher traffic volumes than those which justify construction of a non-toll facility. I fail to understand how this can be a "study" in any scientific meaning of the term. On February 17th, I have been given the attached PDF traffic estimates for the section of I-69 in Monroe County known as 3-C by Michelle C. Hilary, Office of Environmental Services, Indiana Department of Transportation. These are the numbers being used in the I-69, Evansville to Indianapolis study. They are based on I-69 not as a toll road. They show a trend that I believe calls into question the purpose and need section of the Tier 1 EIS. They certainly don't support a revision of the toll conclusion above. PDF of Tier 1 FEIS traffic counts. PDF of Tier 2 working DEIS traffic estimates. The specific section that I focus on below is the new terrain section of I-69 in Monroe County. This is the section of the greatest Karst concern. I list INDOT calculations for trucks for this section from the DEIS, The Tier 1, FEIS and the latest available numbers being used for the Tier 2 DEIS. Section I-69, 3C section 4 at section 5 Monroe County trucks / day total vehicles/day Tier 1 DEIS* 12,305 - Tier 1 FEIS 7,600 28,000 Tier 2 DEIS- in progress** 5,700 25,300 * This number is a calculation based on truck hours savings see: http://www.i69tour.org/freight.htm ** It would be consistent with other toll situations to assume a lower traffic count if I-69 were made a toll road rather than a free interstate. I am having much difficulty placing any faith in the logic of this study based on the facts and have formally made this charge to INDOT, FHWA and other Federal agencies. We also challenge the jobs numbers put forth in the objectionable INDOT document below.
It is an unfair tax for the living and the unborn. Those born 50 years from this date will be taxed unfairly and are given no chance to comment. The funds from this action could have been accessed by taxation of a few cents per gallon, but instead a small selected population of the state will pay. CHAPTER 9 Reason’s Reasons Wrong The development of Major Moves and the passage of HB1008 were supported by more than one visit to the legislature by Robert W. Poole Jr. a Reason Foundation project director of the document: “Should States Sell Their Toll Roads?” 1. We fault the logic of some of this Reason Document and 2. In chapter 10, We fault supporters of Major Moves who touted the virtues of Major Moves, while ignoring the Reason documents agreement with the Constitution of the State of Indiana Article 10 section 2. Analysis: Reasons' reasons are wrong regarding Private Toll roads. As Major Moves moved through the House Ways and Means and then Senate appropriations, INDOT and Mitch Daniels have sited the Reason Foundation the think tank behind Privatized Tolling of Roads. Robert W. Poole Jr. addressed the Indiana Legislators twice or more. Several speaking in favor of Major Moves as legislation and government officials spoke publicly, quoting and referring to this document. The Illinois Toll Road sold to Cintra of Spain for 1.8 Billion Dollars. It has excited proponents of privatization. It is Indiana Governor Daniels' Model for the Sale of the Indiana Toll Road. We quote heavily from Reason's pro-privatized tolling document below in the paragraphs indented. See what the Reason Foundation have to say about the sale of our roads in their document The Global Toll Roads Industry. These privatized toll road proponents are blinded by their pro privatization bias: The Global Toll Roads Industry. http://www.reason.org/ps334.pdf "Even before it closed on the Chicago Skyway, the private concessionaire had begun to reduce its costs. It hired a large parking building operator to provide toll collection services, since collecting parking fees isn't much different from collecting tolls. This subcontractor found he could hire toll collectors for $12 an hour, less than two thirds the prevailing pay rate at the city and among state toll authorities. 61 State toll authorities are notorious over-payers, at least in the northeast and Midwest, as evidenced by the flood of applications they get for vacant jobs on the rare occasions one isn’t filled by an insider. Higher employee pay means higher tolls." Note that they support the foreign privatization company for lowering American's wages, because they claim, "Higher employee pay means higher tolls."" Unfortunately this is incorrect. The privatized Illinois toll road doubled the tolls charge the motorists in the first six months. What's wrong with this picture? BTW, Illinois was showing a profit with this road before it was sold: "In the last year for which we have accounts it made $43.2 million in toll revenues while incurring expenses of $34.8 million for a profit of $8.4 million." If the state had doubled the tolls, as did the Spanish who leased it, and traffic continued to use the road at the same volume, the profits would have increased to $43.2 million for one year. This return would have yielded the same $1.8 Billion in 41.6 years. For the private company to recover their investment and then make a profit in less than $41.6 years, the costs to operated the road must be reduced. Do they have magic asphalt of better quality, or are they simply removing or lowering the benefits and wages of more US citizen's jobs and then providing a more costly toll? If you think these proponents of privatized tolling don't realize that the tolls charge will and are increasing, we share this quote: "State toll authorities own very valuable business property. New highways are extremely difficult and expensive to build so an established road in a busy urban area or a turnpike on a heavily trafficked interurban corridor will often command higher toll rates than have been set by the political processes of state authorities." The Tolling proponents are so biased toward privatization from any quarter and sure of their dislike of government jobs, which they seem to forget their goal of providing benefit to USA road users, taxpayers, and U.S. residents seeking employment. North Americans seem forgotten in the excitement over public property liquidation to privatized tolling regardless of the "privateer's" home country: "The group that bought the business of the Chicago Skyway is half based in Madrid and the other half in Sydney. While strictly accurate, that characterization doesn't really convey their essence. They are both international in character with operations and employees hired and located in different countries." So what! Are we happy that our privatized road transportation dollars are now being spent to further increase the US trade deficit? The Reason Foundation and Daniels claim to be anti taxation, but for them a toll ceases to be a tax when it is sent to a foreign owned corporation. They so hate Government that any job provided by government is bad and any provided by business is good even if the Hoosier job lost goes to raise a higher or new tax on other Hoosiers to provide benefit on some other continent. Still why are they so excited about providing jobs for foreigners while they relish lower pay and lesser benefits for the Americans who operate the road on a daily basis? How many USA motorist will think their taxes were lowered when the cost of driving to work on the same road doubles. If their position is clear to you, drop us an e-mail. Frankly, we don't get it. Libertarians and Republican have often been among our strongest supporters opposing I-69 for property right reasons and because the I-69 project is such a boondoggle project. We ask them to consider two things: * Roads are already paid for by a user tax. We by fuel buy the gallon and use it by the mile. * State owned roads of the USA are a different animal. A world where any mega cooperation can privatize others private property to compete with another privatized road(s) would be a world dominated with asphalt and bulldozer over private* property and a place of numerous under utilized or bankrupted roadways instead of farmland and valuable real estate. The bottom line, this is privatization vs. private property. This is a upfront loan for a new “private-toll-tax”, where the tax money is as likely to next build a road in China as provide benefit to the USA. In Chapter ten, next, we point out that supporters of the Reason Foundation study ignore the section of that document regarding the wise use of privatization funds that totally agrees with the Constitution of the State of Indiana Article 10, Section2. CHAPTER 10 Reason’s Reasons Right were Ignored. In Chapter 9 of this document,” Reason’s Reasons Wrong” we found much disagreement with in the logic of the Reason Foundation Document, “Should States Sell Their Toll Roads?”. We pointed out that Industry, Government officials and Robert W. Poole Jr. himself touted the Reason Document as supporting Major Moves Privatized tolling of roads by long-term contract. Right Reason Reasons were Ignored
In chapter 10, We fault supporters of “Major Moves” who touted the virtues of Major Moves as an enactment of the principles in “Should States Sell Their Toll Roads?”, while ignoring the documents agreement with the Constitution of the State of Indiana Article 10 section 2. Those several who spoke of the supporting documentation of the Reason Document never mentioned the section of that document that is most important…. The proof of benefit: >From page 11 of that document: A. Wise Use of the Proceeds Our conclusion: The Reason Think Tank Document that was the supporting study for the Major Moves Legislation is completely consistent with the Constitution of the State of Indiana. If the sale of the Toll Road by long term lease is supported by the Reason Foundation document, so too then is the use of those funds as defined by the Constitution as presented in our legal memorandum Appendix 1. Assuming a legal and workable Major Moves Law, payment of public debt is the appropriate distribution of funds. APPENDIX 1:http://www.i69tour.org/MM_MEMO.pdf The analysis, by the Indianapolis
law firm Mullett, Polk &
Associates, concludes that Major Moves violates Article 10 section 2 of
the Indiana Constitution, which requires that “the net annual income”
from “public works belonging to the State” must revert to the General
Assembly and be used to pay off the
state’s “public debt”.
APPENDIX 2: http://www.reason.org/ps334.pdf Reason
Foundation: "Should States Sell their
Toll Roads?"
by Peter Samuel Project Director: Robert W. Poole, Jr. |
© COUNT US! 2002 -'03,'04,'05,'06 |
