Thursday, February 13th, 2014
I haven’t had much to say about the Illiana Expressway, a proposed 50-mile road linking I-65 to I-55 across the far south suburbs of Chicago and Northwest Indiana.
The road has been controversial in Chicago because it was not one of the strategic initiatives of the regional GO TO 2040 plan, and thus in a sense makes a mockery of the years of planning and community dialog that went into that project. Many in the city, as well as various independent organizations like the Metropolitan Planning Council, have said the Illiana is a sprawl producer and poor use of precious financial resources.
Northwest Indiana has been foursquare behind it, and why wouldn’t they be? NWI is Indiana’s premier example of sprawl in its purest form. The population of Lake County has basically been flat since 1960, but during that time there has been massive abandonment of the northern county (Gary, Hammond, etc) in favor of new greenfield locations like Crown Point. The existing freeway infrastructure was designed to serve the old built up areas in the north. The Illiana would serve the new focus of the county further to the south. So naturally they want it. Even if the road is a financial loser, that’s an even bigger win for them since it means subsidies from the rest of the state.
Which is exactly the scenario that appears to be shaping up on both sides of the border. As I noted previously, this road is being billed as using a privatization scheme, but the reality is that the public is backstopping the finances. It uses a so-called “availability payments” approach in which the taxpayer guarantees the returns to the vendor and assumes all the revenue risk.
How big is that risk? Looks pretty big. Greg Hinz over at Crain’s Chicago Business has the story, noting that the Illiana Expressway will likely charge tolls that are four times as high as the rest of the tollway system:
Any company that tried to sell a product at up to four times the competition’s price likely wouldn’t stay in business very long. Customers would walk right away, and management at a minimum would find itself out of a job. But things work differently in the wonderful world of government.
The story is that, based on documents recently, and quietly, released by the Illinois Department of Transportation, it appears the road quite probably would have to levy tolls two, three and even four times those charged on other Illinois tollways.
Yes, you read that right. Four times now charged elsewhere in the metropolitan area by the Illinois Tollway. A cool $11.81 for an auto to drive the road’s entire proposed 47-mile length, and an icy $58.13 for a 16-wheeler.
With no toll at all on the nearby I-80, an existing expressway that runs about 10 miles or so north of the proposed Illiana, guess where the trucks are likely to end up?
As Hinz notes, private toll roads around the country are experiencing significant traffic shortfalls, even when offering a congestion free alternate to a choked up regular route. If that happens here and toll revenues don’t match up with forecasts even with jacked up rates, guess who loses? The taxpayers and motorists of Illinois and Indiana, that’s who.
Don’t expect any high profile bailouts. Rather, an increased share of the two state’s annual highway fund will have to be diverted to covering the shortfalls, crowding out spending elsewhere. This is one of the big fears in the rest of Chicagoland, where there’s a massive infrastructure investment deficit. (From a Northwest Indiana perspective, it’s who cares since it’s the rest of Indiana who will likely see their major projects cut).
The jury is still out on this, but the Illiana deserves serious attention as a potential boondoggle in the making.