Daniel Gross has an article in Slate about the Indiana Toll Road sale.
If a governor told you there were a way to spread pork, raise funds for infrastructure investment, promote jobs, avoid raising taxes, and put a dent in the trade deficitâ€”all in one fell swoopâ€”you might think he had a bridge to sell you. And you’d be right. Only in this case, it’s a toll road. And instead of a sale, how about a long-term lease?
Mr. Gross goes on to explain the benefits of toll road privatization. He then goes on to discuss the opposition:
I got the sense that the toll lease made Hoosiers uneasy for reasons they couldn’t quite articulate. It’s not like the buyers could uproot the concrete and move it to Queensland, Australia, or Seville, Spain.
. . .
I think the uneasiness has more to do with what it says about the peculiar fiscal climate in the United States. How is it that in the richest nation on the earth, localities simply don’t have the cash to do necessary maintenance on basic infrastructure, the political will to raise such funds, or the competence to run such easily profitable operations? Why are they being forced to sell off long-term cash cows for short-term cash?
Leasing or selling a public asset is a classic one-shotâ€”a short-term measure that bolsters the balance sheet today but that can’t be repeated. While politicians like Daniels focus on getting through the next few fiscal years with minimum pain, foreign companies are thinking about how to get rich off of tolls for the next three-quarters of a century. From Gov. Daniels to his former boss, President Bush, there’s a troubling unwillingness to align governmental resources with the express goals and responsibilities of government. At the federal level, we rely on China’s central bank to buy our bonds and fund basic operations. As a result, our tax revenues wind up in Beijingâ€”as interest payments. At the state level, Indiana is relying on foreign companies to lease public infrastructure like toll roads. And under these arrangements, tollsâ€”taxes people pay for drivingâ€”are being paid to foreign shareholders of foreign companies.
The entire article is worth a read.