Toll Road Bankruptcy: We Don’t Automatically Get Our Road Back

The Associated Press has an article entitled “Toll Road An Epic Mess, Donnelly Says”. The operator to whom we leased the Indiana Toll Road for 75 long years has gone bankrupt about 10% of the way through the lease term. One of the selling points, back in 2006, was Gov. Daniels saying “if the leasing consortium goes bankrupt, “the Toll Road reverts back to the state’s control.””

Because this is not, in fact, true, the AP article says that Gov. Daniels “misspoke.” It’s plausible that Gov. Daniels believed that to be true but was wrong. But, even if we give him that benefit of the doubt, I still wouldn’t call that “misspeaking.” He said what he meant to say.

I have not driven the Toll Road in years. (Once again, a big thanks to the motorists of Northern Indiana for subsidizing the roads of southlanders like me. That’s mighty nice of you.) So, not having seen it, I can’t say first hand what it’s condition might be. Political opponents of the toll road deal have an incentive to paint the conditions as a scene out of the Road Warrior, soaked in the urine of hobos.

Sen. Joe Donnelly called the situation “a mess of epic proportions” and has asked the Indiana Finance Authority, which owns the toll road, to ensure that road conditions are safe, toll booths are staffed, and rest plazas and restrooms are clean.

“The people of northern Indiana and the entire state of Indiana deserve better and were promised better,” he said.

Travelers have complained of long waits at toll plazas, bridges that haven’t been repaired in more than a year and rest stops that reek of urine, Donnelly told The Times in Munster.

According to the article, however, the State gets the road back only if the post-bankruptcy, restructured entity defaults on its obligations. My sense (without having read the lease in several years) is that, absent a pretty bright line default, getting the road back for subjective concerns about road conditions would happen only after lengthy, scorched earth litigation.

State forgoes $80 million pre-kindergarten grant opportunity

Chalkbeat and Matt Tully have articles reporting that the governor has chosen to drop out of an opportunity to get $80 million in pre-kindergarten education grant funding.

Tully reports that the State’s chances of getting the grant were very good:

Pence’s Family and Social Services Administration had worked with the state Department of Education and others on the grant since the federal government rejected a previous application last year. The state’s odds had greatly improved this year, as the federal government recently announced in the Federal Register that Indiana was among just two states, along with Arizona, that had qualified to apply for up to $20 million annually, for up to four years. The two states were labeled “category one” states; they were eligible to apply for substantially more money than the other 13 states.

The explanation from the Governor’s office was vague, citing concerns about getting involved unnecessarily with the federal government and generalities about “untested and unproven objectives in federal policy.” The cynical mind, however, immediately jumps to Gov. Pence’s presidential ambitions.

Even bearing in mind that our share of this federal money is coming out of our pockets anyway and will now be going to some other state instead, I think we can all agree that forgoing $80 million to improve the education of young Hoosiers is a small price to pay to ease the minds of Iowa and New Hampshire caucus and primary voters.

Indiana Supreme Court to Hear Oral Arguments at Purdue

For those of you in the Lafayette area who are interested in seeing our state Supreme Court at work, you might want to check out the oral argument set for November 10, 2014 at Loeb Playhouse in the Stewart Center.

The case under review is Kramer v. Catholic Charities of the Diocese of Fort Wayne-South Bend, Inc. (pdf), which was a split decision before a panel of the Court of Appeals. Judge Najam wrote the majority opinion with Judge Crone concurring while Judge Baker dissented.

The Supreme Court summary of the factual background of the cases states:

[A] child’s pre-adoptive placement (with the Kramers) failed when the child’s biological father came forward. The father established his paternity and successfully contested the adoption. The Kramers then sued the adoption agency (Catholic Charities) alleging negligence for failing to discover the father’s registration with Indiana’s Putative Father Registry.

At issue is whether the timing of the adoption agency’s review of the putative father registry was negligent, whether the adoption agency had a duty to check the registry, and whether the adopting parents waived their ability to bring this claim when they signed the agency’s release form. As luck would have it, I discussed the release/waiver issue in a blog post for my law firm when the Court of Appeals decision came out in March.

Separating Ourselves from the Michiganders

Maureen Hayden, writing for CNHI, has an article entitled “Retracing a border incites tensions between Hoosiers, Michiganders” (h/t Indiana Law Blog).

The issue has to do with surveying the border between Indiana and Michigan. (If you’re a Michigander, dependent on hand-based maps, that’s the area between the palm and wrist.) When the original survey was performed in the 1820s they used wooden posts, most of which are long gone. The boundaries are generally known, but small differences can lead to problems. So, the states agreed to re-monument the border.

The new snag is that it’s taken awhile to get going, and Michigan doesn’t think the original cost estimate is reasonable. Apparently the original estimate from 2009 figured for about $1 million in expenses with each state footing half the bill. But, Michigan thinks that the estimates weren’t accurate Michigan anticipates that the true cost is more like $2 million.

Michigan insists that a survey crew needs to spend eight hours a day occupying a point on the boundary to get an accurate global positioning reading from satellites, for example. Indiana surveyors think the same work could be done in less than three hours.

“If you do it their way, it costs about $1,600 a day. If you do it our way, it costs $600 a day,” [St. Joseph County Surveyor John] McNamara said. “You can see how fast the extra costs add up.”

Indiana has only appropriated $500,000. So, it sounds like the states are going to haggle over the budget before they get started. Michigan should figure a way to get a bridge involved so Indiana could give them $1.7 billion the way we are to Kentucky.

The economy rewards leverage

As is his wont, Abdul just stirred the pot a little by saying on Facebook:

Ok, let’s make a deal. I’ll concede “income inequality” if you concede “work ethic” inequality.

That’s true, as far as it goes, but as he acknowledged in the discussion thread, the correlation is imperfect. It’s an old theme around here, but seems worth repeating.

Much as we’d like it to be, the economy isn’t a morality play. The economy doesn’t reward virtue. It rewards leverage. Hard work is one kind of leverage, and probably the most accessible form for the average person. Talent is another. Already having money is a big form of leverage. Controlling a bottleneck in the economy (e.g. monopoly or money supply) is yet another.

From the perspective of the person who makes the money, by and large, it seems like a function of their hard work and talent. They are acutely aware that they busted their ass, and they’ve seen, probably carried the load for at one time or another, any number of people who were lazy and talentless. What is often less obvious to someone in that position are the people who are also busting their asses with much less (or no) payoff. And even harder to recognize — on account of Upton Sinclair’s observation about the perspicacity of one whose salary depends on not being perspicacious — is when one’s own good fortune depends on siphoning off some portion of the value created by others.

The lack of insight into the condition of others is not unique to the well-to-do, of course. Just to pick an example, my guess is that there is a high percentage of employees who have no idea that their employer pays extra to Medicaid and Social Security on behalf of the employee for the privilege of employing them. While they no doubt have their own stressors in life, they perhaps don’t know what it’s like to continue thinking about work most of the day, every day, clocked in or out — where the next client is coming from, whether existing clients will renew their contracts, whether your vendors are cheating you, whether you have the company’s third quarter paperwork in order, etc.

In any event, the economy is complicated. We all have our problems. But, by and large, a person’s prosperity is not a good proxy for insight into the person’s moral character.

SCOTUS Declines to Hear Same Sex Marriage Cases. Lower Court Opinions Stand

The United States Supreme Court has issued its order denying to grant the petitions for certiorari to review the same sex marriage decisions by the various Courts of Appeal. The 7th Circuit had issued its opinion written by Judge Posner which upheld District Court Judge Young’s opinion issuing an injunction which nullified Indiana’s ban on same sex marriages.

Following an opinion by the Court of Appeals, the Clerk of the Circuit Court issues a mandate (See Fed. R. App. Proc. 41). This certifies the opinion to the lower court whose decision was under review. The Court of Appeals issued a stay which prevented the Clerk from issuing the mandate. The terms of that stay says that it terminates automatically if the Supreme Court denies the petition for certiorari. That has happened. Therefore, the stay on the 7th Circuit Clerk has been lifted. The 7th Circuit Clerk is now, I believe, free to issue the mandate, certifying the opinion to the lower court. That should probably happen as soon as the 7th Circuit Clerk can process the paperwork. Once that happens, Judge Young’s initial injunction will resume and Indiana’s prohibition on same sex marriages will be nullified.

A World Class Transportation System

Writing at Strong Towns, Charles Marohn notes that he has a book coming out entitled “A World Class Transportation System.” He is frustrated with the not-even-rising-to-the-level-of-a-Band-Aid approach to transportation policy. Our policymakers try only to come up with funding solutions for our current, outdated, system — and are not successful.

Transportation policy in America needs to focus on building cities that are financially productive and then connecting them with high speed, high capacity roadways. We built the interstate. Cross it off the list. We’re done. It’s now time to use that investment – to mature that system – to start getting more out of it.

Might be worth checking out.

Related – 50 years ago, on October 1, 1964, Japan began high speed rail service – Tokyo to Osaka at 130 miles per hour. Faster than we manage even today in the U.S.

Best Healthcare System in the World: Infant Mortality

One of the reasons for the push to Obamacare and away from the health care status quo is that our system costs way more than other places and yields results that are the same or worse as other countries. One of the metrics that lets us know our health care system is worse is that our infant mortality rate is worse than our peer countries. So, what explains the infant mortality rates?

Those in favor of the health care system status quo like to blame the differential on the measurements. It’s not that the U.S. actually has worse outcomes for infants, we just measure things more thoroughly and report more infant deaths. Aaron Carroll at the Incidental Economist has a post discussing a study that looks at this issue. And, in fact, these advocates have a point it seems. The reporting differences might explain up to 40% of the infant mortality differential — but that leaves us a long way to go.

It seems that one major area where our health system fails is in the period between one month and one year old. And, in particular, it fails infants who don’t have the good sense to be born to white, college-educated, married mothers. Those infants have a similar mortality rate as their European counterparts. The other infants are more likely to die.

I think it’s safe to say that being poor in the U.S. is a lot tougher than being poor in other Western countries.

Consent of Putative Father for Adoption Where He Has Abandoned the Expectant Mother

I was struggling through the General Assembly’s barely usable website (somewhat visible framed PDFs everywhere!) and found a relatively interesting hearing conducted by the interim study committee on the judiciary concerning SB 27 from last session and the issue of whether the consent of a father who has abandoned a child should be required for the mother to put the child up for adoption. (Maybe it’s SB 27, I see references to legislation introduced by Rep. Steuerwald but went to his legislative page and can’t see such a House Bill listed. But, again, the General Assembly’s unnecessarily complicated web page is unnecessarily complicated.)

The Indiana Council of Juvenile and Family Court judges submitted a letter with concerns, stating that: 1) abandonment of the mother doesn’t necessarily equate to abandonment of responsibilities to the child; 2) the timing with which the father can be served with a notice of adoption or file a petition to establish paternity; 3) the situation where a pregnant woman refuses contact with the putative father without “justifiable cause;” 4) an inadequate definition of “abandonment.”

A letter from a birth mother about a situation where, in her mind, allowing the biological father to prevent adoption by requiring his consent even though he would have been unable to provide financially for the child or mother would be unfair. “If a man is able to prevent a woman from choosing adoption . . . and encumbers her with the ensuing responsibilities and expenses then it is only prudent that he shares in those responsibilities.”

Adoptions of Indiana submitted a letter indicating that there is a need for a law regarding pre-birth abandonment in the situation where a father signs up on the putative father’s registry or file a paternity action “out of a desire to control and spite the expectant father.” The letter suggests that, where the putative father fails to support the mother financially during the pregnancy, that is evidence that the father has abandoned the expectant mother.

Elusive State Money in the News

I noticed some similarities between two stories involving availability of state money both of which are at least superficially peculiar given the State’s recent announcement of a $2 billion surplus. Perhaps someone with better knowledge of the state’s fiscal processes can tell me whether the cases are similar or not, and whether they have anything to do with the announced surplus.

The first story has to do with a story by Niki Kelley in the Fort Wayne Journal Gazette concerning the availability of State money to combat domestic violence. The Indiana Coalition Against Domestic Violence says the coalition has had to fight with the Indiana Criminal Justice Institute to get all the money that is appropriated to it.

Indiana Criminal Justice Institute spokesman Gary Abel [confirmed] that $344,000 of funding for the domestic violence prevention and treatment program was reverted to aid the state’s bottom line at the end of fiscal year 2014 in June.

All agencies were told by [Governor] Pence’s Indiana Office of Management and Budget to revert money – or not spend everything appropriated.

Doing the math, in the ICJI’s case, the bulk of the $500,000 it reverted must have come from the domestic violence program. “Abel said the money was reverted because there was no plan submitted on how to use it.” So, the State’s explanation is that the money was there but it’s the Coalition’s fault for not submitting a plan for spending the money.

The other story I saw was by Ron Wilkins of the Lafayette Journal & Courier and had to do with a road project in West Lafayette to reconstruct Happy Hollow Road. (Disclosure: this is a road I drive nearly every day to work). The reconstruction was scheduled to begin today but the Indiana Department of Transportation stopped the project because it reportedly ran out of money for Fiscal Year 2014. According to the City Engineer, INDOT was supposed to have obligated FY2014 funds for the Happy Hollow project.

INDOT has apparently said that the funds were obligated but “the purchase order was not written” and funding was withheld. “INDOT has said once they see a plan for the balances, they’ll release the money.”

The money at issue here seems to be federal road funds that are overseen by the State. So I’m not sure that this money would play into the State surplus claims one way or the other. But, I guess I was struck by two stories in the same day that had the State blaming a failure to release funds on the intended recipient’s alleged failure to submit paperwork.