The Blade Misses the Big Point in the Ohio Turnpike’s Failure to Implement EZ-Pass — It Should Be Privatized

The Blade is justifiably impatient with the excuse-making at the Turnpike Board:

A foolish pass on E-ZPass

Millions of American motorists already know and appreciate the convenience of electronic toll collection on their turnpikes and toll roads - until, that is, they see those “Welcome to Ohio” signs as they enter the Buckeye State on the Ohio Turnpike.

The day is not far off when a motorist will be able to travel on toll roads from the East Coast to Illinois and never have to stop at a toll plaza - except here in Ohio.

….. Eleven states - Maine, Massachusetts, New York, New Jersey, Pennsylvania, Maryland, Virginia, West Virginia, Delaware, New Hampshire, and Illinois - are now part of the E-ZPass network.

Illinois hooked up last year, installing its “I-Pass” system at nine toll plazas along the Illinois Tollway, and will outfit the remaining plazas this year. Indiana, which just last week privatized its toll road, says the new operators consider E-ZPass a top priority.

So where does this leave Ohioans? Further isolated from more progressive states, something the Ohio Turnpike has no intention of doing anything about.

….. because it has become the standard, E-ZPass states are able to offer reciprocity to motorists who have signed up for E-ZPass somewhere else.

Last September, passenger-car customers of the Illinois Tollway’s I-PASS program began using their transponders to pay tolls in states that accept E-ZPass, and E-ZPass customers from other states were able to pay tolls electronically in Illinois.

Like Illinois, other states which have retained their own names for their system - Smart Tag in Virginia, Fast Lane in Massachusetts - employ the same E-ZPass technology and usually display the E-ZPass logo alongside their own.

All of this makes Ohio Turnpike Executive Director Gary Suhadolnik’s defense of Ohio’s reluctance to enter the E-ZPass age disingenuous. The turnpike, he says, is not a true commuter toll road with big-city congestion like Chicago and is considered basically a pass-through highway for long-distance travelers. Besides, he adds, the turnpike commission doesn’t have the money to install transponder reading equipment at all of its toll plazas.

Well, the money can be found.

Stop, there. A crusty bureaucracy kicking and screaming that it doesn’t want to join the 21st century. Not unlike those city clerks in Philadelphia in the early 1990s who had to be negotiated with before they would accept word processors instead of typewriters.

Here’s an idea to get rid of the problem once and for all: Privatize The Turnpike.

Something like it has been done:

Cintra-Macquarie to take over Chicago Skyway for $1.8b
Oct. 15, 2004

The City of Chicago has chosen the Cintra-Macquarie bid for its Skyway tollroad. Mayor Richard M. Daley announced this today, saying the investors will pay the city $1,820 million for the right to toll the elevated pike for 99 years. Daley called it “a great result for the taxpayers of the City of Chicago.”

The bid is considerably more than City officials expected. They never talked officially about what they thought it would bring but the figure of $700m to $800m was mentioned as the minimum they would accept. By all accounts they would have been happy to get $1200m. Cintra-Macquarie were the high bidder, because after a process of eliminating groups deemed not to have the financial strength or experience the contest became solely a matter of the cash offered. The 99 year term is similar to the term of 407ETR concession in Ontario - a long term but one which generates a higher price than the more typical 30 to 40 year concession terms for tolling.

The mayor said the transaction is the first privatization of an existing toll road or toll bridge in the United States, and “the City expects other agencies that own such assets to follow its lead.”

Daley claimed the transaction was a testimony to improved management of city assets: “Through good management, a road that lost money for many years has been turned into a valuable asset for the City. However, running a toll road is not a core function of City government. And the City faces financial challenges this year and for the next several years.”

Daley said the funds will be used to pay off existing Skyway debt and other City debt, create a long-term reserve fund and strengthen the City’s financial condition. He has instructed his financial people to consult with financial rating agencies and make recommendations for “responsible and prudent use of the funds.”

The Skyway is a bit less than 8 miles long. The Ohio Turnpike stretches 240 miles. The Skyway’s toll is currently $2.50 and will, according to the agreement with the Chicago, double in the next nine years. The Turnpike cross-state auto toll is currently $8.95.

How much could the state get for The Turnpike? Geoffrey Seagal at The Reason Foundation looked at what gubernatorial candidate Ken Blackwell is considering, which is something less than an outright sale, and estimated a pretty big number:

Secretary Blackwell wants to better realize the full potential and value of an underutilized state asset—the Ohio Turnpike. A public-private partnership would allow the state to lease the turnpike to a private company using what is called a “concession agreement.” Experience in other states, and around the world, suggests that an agreement could generate between $4 and $6 billion in new revenues for Ohio. Even after the state pays off existing debt on the turnpike, it would still have at least $3.3 billion to invest in new projects.

I say, “Go for it.” For one thing, I doubt the private firm will resist EZ-Pass.