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Thursday, January 24, 2008

"Profit" ins't a dirty word either

We received an email in response to the "'Foreign' is not a Dirty Word" Commentary. I won't print that whole email, but the essence was that a private company want "profits" and that the Commonwealth Foundation is "a lackey" for corporate interests and "no friend to taxpayers". Here is my response:

A Turnpike lease would give the state a large upfront payment that taxpayers would earn interest on (rather than paying interest on billions of bonds under Act 44), and could likely result in lower tolls rather than the increases under Act 44 (and tolling I-80).

Could you explain how it is in taxpayers' interest to pay more to drive the turnpike, rather than less? How is it better for taxpayers to pay interest, rather than earn interest?

Yes, we do not fear "profit" as an evil term. We do not propose the state takeover of all farms in Pennsylvania because evil farmers are profiting off our need for food. The Commonwealth Foundation has always believed that voluntary exchange and the free market as the best way to meet the needs of the public; we don't feel much "shame" in this.

And to think that no one "profits" off the Turnpike Commission is absurd. The Pennsylvania Turnpike Commission has a well-documented record of being a patronage playground for politicians, which has resulted in significant waste, fraud, and abuse. A lease of the Turnpike would eliminate many of these problems:

  • In 2005, approximately 2,300 people were employed by the Commission, including about 500 middle managers (nearly one per mile of the Turnpike), many of whom were hired as political favors.
  • According to published reports, Turnpike CEO Joseph Brimmeier hired his son, a cousin, two sisters, the son of his godmother, the son of a county party chairman, and the son of a Congressman.
  • According to a 139-count federal indictment of Senator Vince Fumo, Turnpike consultant Mike Palermo—who earned $220,000 over two years—apparently completed no work for the PTC, but did find time to manage the senator’s 100-acre Harrisburg farm.
  • The indictment also alleges that when he was no longer able to put his no-work contracts on the state senate payroll, Fumo used the Turnpike payroll instead.
  • The Turnpike Commission used toll revenue to spend $26,000 per month lobbying state legislators to pass Act 44, and spent $380,000 lobbying the federal government.
  • The Turnpike Commission has been using toll revenues to buy radio and newspaper ads across the state to deflect criticism of I-80 tolling.

You will note that if the Turnpike Commission, or another non-profit, association, or government agency, proposed a better deal for taxpayers, we would gladly support that. We support competitive bidding of a Turnpike lease, not a sweetheart deal for the Turnpike Commission, or a deal crafted behind closed doors to benefit patrons of elected officials.

The Turnpike Commission and supporters of Act 44 are asking to push ahead without federal approval to toll I-80 and advocating against seeking bids. We argue that should see all the offers, then choose the best one for taxpayers and motorists. Who is being really being a lackey for special interests?

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