Toll Road Tales: Good News for Taxpayers, Motorists

TReactions were varied recently when the company operating the Indiana Toll Road filed for bankruptcy. A researcher at the Harvard Kennedy School emphasizes the positive aspects of how that deal was structured and focuses on the continually evolving role of each party in such an agreement. Governing reports:

n 2005, two companies came together to form the Indiana Toll Road Concession Co. (ITRCC), which won the right to operate the toll road in exchange for a $3.8 billion up-front payment. The deal limited how much tolls could rise and included a trigger requiring the consortium to expand the roadway if certain congestion benchmarks were reached. The $3.8 billion threw off about $250 million that was used to fund other state transportation priorities.

Like so many other enterprises, ITRCC was done in by the Great Recession. Its financing structure called for large debt payments at the end of the first decade, which proved overwhelming in the face of revenues that didn’t meet projections when the downturn hit and traffic volume fell.

But what’s reassuring is that motorists will see no interruption in service or toll increases as a result of the bankruptcy. The roadway is still subject to the same performance metrics, and there will be no taxpayer bailout. State officials will first try to find a new operator to take on the remainder of the concession deal. If that doesn’t work out, the ITRCC will likely be recapitalized with an altered debt schedule.

In either case, customers will retain the benefits from the $458 million ITRCC has invested since 2006 in road, bridge and pavement improvements and a new electronic tolling system.

While it appears that the Indiana Toll Road deal has succeeded at protecting taxpayers and motorists, that doesn’t mean there aren’t lessons to be learned from the bankruptcy. To maintain a true public-private partnership, governments might want to avoid taking the entire concession payment up front.

Chicago completed a similar deal just before the Indiana Toll Road agreement and couldn’t resist the temptation to use the upfront windfall to plug other holes in the city budget instead of using interest from the concession payment to maintain transportation infrastructure. More recently, public-private partnerships for Virginia’s Pocahontas 895 parkway and Colorado’s Northwest Parkway featured smaller upfront payments but give taxpayers a cut of the ongoing toll revenue.

Tweeting for the People (and Making Them Pay for It)

This story from the Philadelphia Inquirer is filled with some of the more entertaining quotes about social media — and the public sector — you’re going to find.

TEN-YEAR-OLDS can tweet on their own.

But Councilman Jim Kenney apparently needs help. Professional help.

The at-large councilman is spending $28,800 in taxpayer money this fiscal year for the Center City-based company ChatterBlast to perfect his "social-media strategy." The company monitors his Twitter and Facebook pages, and has posted on Kenney’s campaign-funded website.

No other Council member pays a contractor to help with Twitter. Just Kenney, who has the third-priciest staff on Council. He has 10 staff members with a payroll of $654,034, including his salary – plus another outside communications consultant.

Why does he need ChatterBlast on top of that?

"I, at 53 years old, do not have that facility," he said. "So I need consultant advice to communicate with a group of folks who are not necessarily in my age group."

Martin O’Rourke, the politically connected PR man whom Kenney’s office already is paying $30,000 this fiscal year for a communications contract, doesn’t have that facility, either.

"I have no clue how to tweet; I still don’t understand the mechanics of it. It’s a thing of the future," said O’Rourke, who has earned big bucks through contracts with City Controller Alan Butkovitz’s office and the Philadelphia Parking Authority.

ChatterBlast, perhaps not coincidentally, has contracted with both of those agencies. O’Rourke said Tuesday that he has no financial stake in the company, but he "suggested that people talk with them."

Matthew Ray, a co-founder of ChatterBlast, which calls itself a social-media marketing company, defended ChatterBlast’s work for Kenney as a good use of taxpayer dollars. He said that citizens’ problems have been solved thanks to Kenney’s account.

"Having the councilman connect with people via social media is as important as having people read the Twitter feed for Target or Kim Kardashian," he said.

"I think everyone knows $28,000 isn’t a huge amount."

Kenney’s account often tweets several times a day, about everything from his legislation to what he’s having for lunch. So, is ChatterBlast behind such tweets as the one quoting Irish soccer superstar George Best saying, "I spent 90% of my money on women and drink. The rest I wasted"?

Ray said that Kenney sometimes tweets without help from ChatterBlast and that ChatterBlast sometimes tweets without input from Kenney. But most of the time, he said, Kenney comes up with the tweets and then runs them by ChatterBlast to publish. That’s what happened with the tweet about Best.

"What we actually do is type it in," Ray said. "It’s no different when someone dictates a letter to somebody."

Local lawyer Jared Klein learned that Kenney wasn’t manning his own Twitter account on Election Day last November when he tweeted that people should vote for Kenney, only to have Kenney’s account tweet back: "I’m not on the ballot today, but I thank you for the support and for supporting my friends!"

Nepotism at the Township Level: Monroe County Edition

More evidence Indiana needs HB 1005 to pass to start cracking down on township government abuse. RTV6 has the story:

The State Board of Accounts is demanding a former Monroe County township trustee repay more than $95,000 after an audit revealed questionable expenditures involving family members.

Benton Township Trustee Heather Cohee stepped down last week amid criticism that she hired her husband and daughter to perform tens of thousands of dollars of work for the township without proper documentation.

The Attorney General’s Office told RTV6 on Monday that it will likely file a civil lawsuit against Cohee to recover the public funds, as well as a preliminary injunction and temporary restraining order to freeze her financial assets.

According to the audit, Cohee hired her husband, Todd, also a Monroe County Sheriff’s deputy, to perform jobs such as cemetery mowing, parking lot paving, snow removal and landscaping.

Auditors said she also hired her daughter, Brittany, to do regular cleanings for the township, but the trustee had little documentation to support where the money actually went.

Todd Cohee served as the Township Clerk and Brittany Cohee served as the Township Assistance Clerk.

Auditors said Heather Cohee repeatedly did not file a conflict of interest statement for her husband or her daughter, which is a Class D felony.

Heather Cohee was unavailable Monday to discuss her resignation or the audit with RTV6.

Daniele Coe is handing the books for now, while the township board figures out the next steps.

"I don’t have a comment on what has gone on, but I know the board is doing everything it can to make sure business goes on as usual," Coe said.

Board member Lynn Stevens told RTV6 that the board would do everything possible to get the taxpayers’ money back, and said they scheduled an emergency meeting Monday night to discuss options.

Indy Star: Time is Now for Township Reform

We’ve been on this train for quite a while, but now it looks like headway can finally be made for Hoosier taxpayers. The Indy Star asserts:

Daniels has supported the elimination of townships in the past, but he’s never had the votes needed to make it happen. Now, with outgoing House Speaker Pat Bauer reduced to irrelevancy, the governor needs to press hard to dissolve townships, a move that would save tax dollars, reduce corruption and improve the delivery of services.

However, on this issue, the governor can’t count on the Republican caucus to remain fully behind him. Some of the staunchest defenders of the status quo — state Sen. Dennis Kruse, for instance — hail from the GOP. Kruse, for one, contends that townships should be retained because they are a prime training ground for new politicians and political workers.

It’s a shaky argument, of course, given that a majority of states — 60 percent — operate just fine without townships. But it’s one advocates for change, including the governor, must address.

The need for reform became even more critical after Tuesday, when voters gave overwhelming approval to the constitutional amendment that caps property tax rates. Township officials have been serial hoarders of tax dollars; more than $200 million was tucked away in townships’ surplus accounts when last measured. Last month, a trustee in Johnson County acknowledged that White River Township had so much money in the bank that it didn’t need to collect any property tax dollars for at least the next year. That story could be repeated around the state if other trustees were as forthcoming.

Brinegar: Townships Still Wasting Your Money

Chamber President Kevin Brinegar explains legislators "failed to deliver meaningful local government reform" this spring, and taxpayers are feeling the brunt of it. He points to many late 2009 filings and an egregious abuse of township monies in Evansville as examples of why we need to hold legislators accountable.

Filing Returns Doesn’t Have to be So Taxing

Despite its reputation, the Internal Revenue Service is not that evil monster waiting to take away as much of your hard-earned money as possible. It’s simply executing (maybe that’s a bad choice of words) the tax laws set into place. And it wants to help taxpayers, including a recent release titled IRS Reminds Taxpayers That Keeping Good Records Reduces Stress at Tax Time.

Not the most imaginative of titles, but certainly a good common sense message. Personally, I fail to take it into account year after year and end up scrambling to compile all the proper documents. Maybe I’ll learn my lesson this time and hopefully you will pick up a helpful pointer or two.

A few of the highlights:

Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.

If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

  • Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
  • Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
  • Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
  • Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks

Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

  • Bills
  • Credit card and other receipts
  • Invoices
  • Mileage logs
  • Canceled, imaged or substitute checks or any other proof of payment
  • Any other records to support deductions or credits you claim on your return

 For more information about recordkeeping, check out IRS Publications:

Cato: Beware of Government Employee Burden on Taxpayers

A blog post by the Cato Institute raises an interesting question: What happens when taxpayers can’t afford to pay the salaries and benefits of the expanding government workforce? The obvious answer is, "Taxpayers can always afford it." We’ll just likely end up debating the meaning of the word "afford" as much as President Clinton debated the meaning of the word "is." At any rate, the post from Tad DeHaven (former deputy director of the Indiana OMB, btw) is worthwhile:

Dennis Cauchon of USA Today and Stephane Fitch of Forbes recently penned articles on the excessive nature of state and local government employee benefits and the threat taxpayers face as a result.

First, Cauchon reports that “State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants…With bills coming due as Baby Boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both — a task made especially difficult in an economic downturn.”

I would add that the task of cutting benefits for government employees is especially difficult because state and local politicians are generally beholden to the government employee unions. Even those policymakers not predisposed to carry water for the unions are hesitant to ruffle the feathers of a sizable voting block, not to mention a vocal one that still has a lot of regular citizens conned into believing government employees are underpaid, selfless, public “servants.”  Trust me, I’ve witnessed this game first hand.

Cauchon also spotlights the big picture problem: “These medical costs are part of a larger burden taxpayers face in providing health care for an aging population. The federal government has a $1.2 trillion unfunded obligation to pay medical costs for retired federal workers and military personnel. Medicare and Social Security push the nation’s unfunded promises above $50 trillion.”  He also notes that the same private sector employees who pay for these benefits via taxes are not so lucky: “Unlike private companies, most governments subsidize health insurance for retired employees.”

Taxes a Key Theme Around Nation

Stateline reports that many tax-related questions will arise via ballot initiatives throughout the nation this election season. Here are just a few I could glean:

* Will the Land of Kennedys be Tax-achusetts no more? It’s possible if the Small Government Act is passed.

* Will Colorado’s "TABOR" be abided? What exactly is it? If you’re like me, you incorrectly guessed it was the name of the newest American Gladiator. Lesson learned.

* Will Nevada adopt a property tax cap similar to California’s? Maybe, but let’s hope the Silver State remains the archetype for good times. After all, Danny Gans needs to make a living.

* Can both taxes and spending be cut in some states? They will if Grover Norquist has anything to say about it.

Grover … also not a gladiator, oddly enough.