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Thursday, August 02, 2007

Why do lawmakers fear competitive bidding?

Chambersburg Public Opinion on the attitudes of some lawmakers towards a Turnpike lease, now that the idea may be revisited.

It seems that many lawmakers need to visit CommonwealthFoundation.org more often.

Take Mark Keller, who "questioned why the state doesn't believe it can profit from such a major asset if private firms can. "

Quick answer: Patronage, corruption, nepotism, politics, prevailing wage laws, and a lack of any incentive to be cost efficient.

Rob Kauffman also needs to brush up on the truth about a Turnpike lease.

Kauffman questioned how well a private firm would maintain the 537-mile road system and whether tolls would skyrocket more than the 25 percent increase set for 2009.
Our report, The Emerging Paradigm, should have answered both questions: a Turnpike lease agreement would limit toll increases, and would specify the level of maintenance--though we think a private firm would do better, because of market incentives. We also discuss some options such as revenue sharing of future tolls.

For a shorter read, and more limited to just discussion of the Turnpike, check out Reason's FAQ on Leasing State Toll Roads and their Response to Critics of a PA Turnpike Lease

Kauffman and others should also check out The Indiana Toll Road-One Year Later.

I would also note that Morgan Stanley's preliminary report suggested that a Turnpike lease would generate twice as much revenue and lower tolls than the enacted plan; and they admitted they overestimate toll increase and underestimate the potential revenue from competitive bidding.

Even if Kauffman and others are right and the Turnpike Commission's plan is the best deal the state could possibly get, we still should open it up for competitive bidding. Maybe no one will offer more revenue to the state or lower tolls, and we stick with the Turnpike Commission. But why wouldn't we want to see what other offers are out there?

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