Illinois was in dire financial straits before the pandemic-induced shutdowns ground the economy to a halt, but a new study said the state may have an option that would bring in $19 billion to pay off debt or invest in its crumbling infrastructure without doing so on taxpayers' backs.
The nonpartisan Reason Foundation found Illinois could net $19.4 billion by leasing the rights to nine state-owned toll roads.
"These are the cream of the crop of the country's toll roads," said Robert Poole, author of the study and director of transportation at Reason Foundation. "Chicago paid off nearly $1 billion in debt with its Skyway lease proceeds, while Indiana fully funded a 10-year transportation improvement program. 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."
Indiana leased a host of infrastructure projects with a $3.8 billion lease for tollways in 2004, which later grew when the operating company went bankrupt and had to auction off the agreement. Over ten years, Poole said the deal was considered a significant boon for the state's infrastructure.
Even though Illinois stands to make more than any other state Reason examined, Poole estimated the deal would pay down about 14 percent of Illinois' $136 billion in total pension liabilities.
The lease agreement, referred to as a public-private partnership, would allow a private company to take responsibility for the toll road, collect profits and absorb losses. Poole said the agreement could contain some stipulation about hiking rates and deals on tollway road conditions. The Illinois Tollway Authority had a $1.6 billion budget in 2019.
The most often used example of a deal like this going wrong is Chicago's parking meter lease. In 2008, the Chicago City Council agreed to a long-term lease of the city's parking meters in exchange for $1.2 billion. In the following years, the private company earned back what it paid the city within a decade of operation and still have more than six decades of the contractual agreement to go on the 75-year lease. Poole said parking meters aren't an asset that should be leased in the same manner as a toll road.
The city also leased the Chicago Skyway and used the proceeds to pay down debt and improve their bond standing.