In West Toledo, Gov. John Kasich listens as Jerry Wray, director of the Ohio Department of Transportation, discusses private-sector operation of the Ohio Turnpike.
Gov. John Kasich touted privatization of the Ohio Turnpike while in Toledo Monday, predicting that it would generate "billions of dollars to improve highways, bridges, and waterways."
With Toledo Mayor Mike Bell by his side, the Ohio governor described the turnpike as a "very underutilized asset" that could become a money-maker for both a private operator and the state of Ohio with a properly structured lease.
He likened the privatization concept to a homeowner who also owns an undeveloped plot next door and leases it to a farmer who raises crops to provide income for both.
But Mr. Kasich backpedaled on elements of the proposal he had described at previous news conferences, such as a $3 billion revenue estimate for the state and a pledge that at least some of that income would be designated for transportation projects in Ohio's northern half, in recognition of area residents' toll-paying burden since 1955.
While stating that revenue from a turnpike lease could be used for projects such as widening I-75 between Toledo and Findlay or catching up with long-awaited channel dredging in Toledo's harbor, the governor declined to commit to any specific uses.
"What is the single best investment we can make for the state? We need to get out of this regional mentality," Mr. Kasich said during the news conference at the Ohio Department of Transportation's field office off Douglas Road in for its I-475 reconstruction project in West Toledo.
During a separate news conference half an hour later outside the same state field office, State Rep. Michael Ashford (D., Toledo) said the Kasich administration appeared willing to settle for far less revenue on any deal than Indiana got five years ago for its shorter toll road and predicted that "selling the Turnpike" would simply result in higher tolls and job losses at the turnpike.
"Let's talk about the job growth and where the money's going," Mr. Ashford said.
"Nobody's going to worry about quality or what people are going to have to pay to use the turnpike," George Tucker, the executive secretary for the Greater Northwest Ohio AFL-CIO, said before he predicted higher tolls resulting in more traffic and accidents on parallel secondary highways.
Mr. Tucker said that, while he expected some turnpike jobs to vanish in coming years because of E-ZPass automated toll collection, he fears turnpike privatization "could lead to drastic job cuts" as has occurred at privatized Ohio prisons.
But Mayor Bell, speaking at the governor's event, said he believes Mr. Kasich "is totally on the right track" with a creative plan that he believes will help northwest Ohio.
"A lot of people that criticize this; they don't have a better idea. They just don't like this idea," the mayor said.
Meanwhile, Jerry Wray, director of the department of transportation, said a private operator would be required to adhere to performance and maintenance standards for the turnpike and would have to agree to limitations in toll increases in its lease.
Other conditions, Mr. Wray said, include a 50-year limit on such a lease, which would provide both an up-front payment and an annual percentage of toll revenue, with all resulting income dedicated to highway and nonhighway infrastructure, not general government expenses.
But Mr. Wray and Governor Kasich declined to set any revenue for a turnpike lease.
"If we don't get the money that we think we ought to get for it, we just won't do it," Mr. Wray said.
Mr. Kasich, meanwhile, hedged on the promise to use turnpike-lease revenue strictly for transportation projects. "You never know [what might happen] when there's a crisis, but I'm not intending to use this for other than infrastructure," the governor said.
Indiana received $3.85 billion from a Spanish-Australian consortium to which it leased the Indiana Toll Road in 2006 for 75 years, but that deal included no share of toll revenue thereafter. The Indiana Toll Road is 157 miles long, while the Ohio Turnpike runs 241 miles between the Indiana to Pennsylvania borders.
Mr. Kasich said his administration is working with a financial adviser to draft the terms of a request for proposals to solicit bids from potential turnpike operators. The budget bill that authorized turnpike privatization talks gives the state legislature the right to review the request for proposals.
A privatized turnpike should generate more revenue because a private-sector owner would have a profit motive to increase traffic -- and thus revenue -- by improving the toll road's restaurants and offering "more family-friendly deals," the governor said.
And regarding turnpike labor, Mr. Kasich said he expected "the good people will stay" with a private operator.
"If you're going to run the turnpike, you have to have personnel who can do it," he said.
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