Illinois could use the money for needed transportation projects in the Rebuild Illinois Plan or reduce the state’s public pension debt.
Los Angeles , 25 de ago (HINA) — A new Reason Foundation study finds Illinois could net between $14 billion and $24.5 billion by leasing the Illinois Tollway, giving the state much-needed money to fund other transportation projects or pay down growing public pension liabilities.
Using data from comparable long-term toll road leases worldwide, the Reason Foundation report estimates that the medium-range net proceeds (after paying off outstanding Illinois Tollway bonds) would be $19.4 billion for a 50-year lease of the Illinois Tollway. The state would likely be able to choose to receive that money in either a lump-sum up-front payment or annual lease payments.
Five U.S. toll roads have entered into long-term leases in recent years, including the Chicago Skyway and Indiana Toll Road. The Chicago Skyway lease is now held by a consortium of Canadian public pension funds and the Indiana Toll Road lease is held by a consortium of U.S. pension funds.
“Chicago paid off nearly $1 billion in debt with its Skyway lease proceeds, while Indiana fully funded a 10-year transportation improvement program,” said Robert Poole, author of the study and director of transportation at Reason Foundation. “Today, most toll road leases limit annual toll rate increases to the rate of inflation, so drivers shouldn’t fear that. The lease agreement would ensure meaningful state oversight of the toll rates and key performance indicators for the Illinois Tollway while providing greater accountability and transparency for the public and toll-payers.”
The study stresses that each state must determine the best uses for the money from a deal, but outlines three possible uses of the proceeds Illinois would receive from a long-term lease:
- Funding major unfunded transportation needs, such as some of the $45 billion worth of projects in the 2019 Rebuild Illinois Plan.
- Reducing state debt, with the aim of achieving a higher bond rating than the current BBB-, to permit financing at lower interest rates.
- Reducing the unfunded liability of state public employee pension funds. The $19.4 billion net proceeds could cover 14 percent of these funds’ 2018 unfunded liabilities.
“As an investor-financed business, a toll road company would likely speed up modernization efforts on the Illinois Tollway,” Poole said. “The state could also ensure there are significant penalties for failing to meet performance metrics and that the lease could be terminated if the company continually failed to measure up to expectations.”