UPDATE (8:40 a.m., Wednesday, January 25, 2006): I stand by the idea proposed in this post that the Democrats in the Indiana Senate should convene a panel of experts to produce a robust minority report that may or may not conclude in favor of Major Moves, especially the Toll Road linchpin. But it's a pleasure to read in a Star article by Ted Kim and Matt Tully's column that on Tuesday, Democratic senators like Vi Simpson of Elletsville, Earline Rogers of Gary, and our newest Democratic senator, Karen Tallian of Portage, seemed to have the same idea -- analysis, not shots from the hip. My own state representative, David Orentlicher of Indianapolis, also appeared to be on the same page. Good for them!
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Governor Mitch Daniels (R) has presented his fellow citizens of Indiana with a fascinating possibility. By privatizing the Indiana Toll Road via a 75-year lease arrangement in exchange for a $3.85 billion lump sum payment, the governor would be able to fund most if not all other major highway construction projects on the state's agenda.
These include the "Fort to Port" plan to upgrade U.S. 24 between Fort Wayne and Toledo, Ohio; the Hoosier Heartland Highway from Fort Wayne to Lafayette; improvements to U.S. 31 between South Bend and Indianapolis; the extension of Interstate 69 from Indianapolis to Evansville; and construction of two Ohio River bridges further joining the Falls Cities area to Louisville, Ky.
Presumably, though I have not heard it mentioned, Western Indiana might be served by constructing the Ind. 641 bypass around Terre Haute.
Major Moves has become indeed a tantilizing prospect. Yet it suffers from poor process, insensitive public relations, and lack of a meaningful response by opposition Democrats. All of these contribute to the present climate in which Major Moves is supported by many Republican legislators, panned by Democratic legislators, and held in skeptical regard by the public. This is especially in the Northern Indiana tier of counties through which the Toll Road runs, if media web polls are a rough guide.
Two mistakes have brought Major Moves to this spot. One mistake is the fault of the governor. The other is the fault, collectively, of active Indiana Democrats including -- but not limited to -- those Democrats serving in the General Assembly.
The solution is developing a group of Democratic experts to prepare a "minority report" for adoption, use, and dissemination by the Senate Democrats, who are next in line after the House passes the bill.
I agree with Gary Walsh, who blogs at Advance Indiana, that privatization is nothing new in Indiana or in American government. More importantly, I start from a premise that Major Moves and the Toll Road privatization in particular may be the worthy policy proposals the governor says they are.
In years of writing about public policy, I have concluded that before a policy is criticized, it must be explained and allowed to breathe fully prior to being pelted with slinged mud that dirties or suffocates. I look at policy advantages first. They need to be analyzed carefully and explained.
It is here that Governor Daniels, oddly enough, has not served his own policy well. The governor seems to be ramming Major Moves through the legislature without any real process. In contrast to cities and counties that deliberate for months and carefully analyze construction and bond arrangements using a plethora of lawyers and investment bankers, Governor Daniels seems to have unilaterally decided over the past weekend which proposal is best. Cities and towns spend weeks, if not months, reviewing bond deals worth seven and eight figures. The governor seems to have personally evaluated a deal worth ten figures in the mere time of one weekend. And he's proud of being speedy.
Alarm bells go off in my head, and they did so all day Tuesday while I was trying to do something else. Where is the report of the investment banker reporting on the proposals received and recommending the proposal favored by the governor? Where is the report and analysis by the state budget director, who was charged by the governor with running the Toll Road process. Where is the recommendation of the governor's public finance director? Where is the legal advice from the governor's legal counsel?
In short, where are the details?
The lack of details is the governor's fault. He accepted bids for a program for which he did not have legislative authority. Now he is trying to ram this fait accompli through the General Assembly on the strength of his say-so alone. He may pay for his presumptive behavior by feeding the skepticism of Hoosiers, especially in Northern Indiana. He may pay by losing the votes of Northern Indiana legislators, whether Republicans or Democrats. He is using brute force. He wants us to believe he can accept bids on a multi-billion proposition on a Friday, determine the best bid -- apparently with no consultation with experts -- by Monday, and have a major legislative committee consent to it via recommendation of enabling legislation by Tuesday? Could he ram this faster? By courting neither voters nor legislators, his proposal loses appeal. It looks like bullying, not selling.
He does his own proposal a disservice. He does a disservice to Hoosiers.
But he is not alone.
Democrats are also doing the proposal a dissservice. And they are not serving Hoosiers.
The Democratic errors are just as greivous as the governor's. Where the governor is trying to ram Major Moves through this legislative session by force, Democrats are responding with talking points but no real substance. They feed on the public skepticism, but they do nothing to analyze and offer alternatives. They look like knee-jerk polititicians, not smart statesmen. They provide stereotypical retorts instead of reasoned criticism. If the governor's sales pitch rises to the level of bullying, the Democratic response is timid. It is driven by the nay-sayers. It does not lead.
The Toll Road privatization cries out for an organized process of minority review. As with any other public finance proposition, there should be publication of rationale, concensus building, and express buy-in by the players involved including investment bankers, attorneys, public officials, and public boards or commissions. Few of these process steps seem obvious in the Daniels modus operendi. To achieve credence, the lack of these usual and customary steps should be addressed immediately. I especially am bothered by the apparent devotion of a mere weekend's time to due dilligence.
As Governor Daniels seems to have forgone a usual and customary process, it is up to Democrats as the loyal opposition to provide the needed process. Thanks to 16 years of holding the governor's office from 1989 to 2005, Democrats in the diaspora that followed the Kernan Administration are loaded with knowlegeable and public-spirited financial analysts. I am not going to name names, but I am going to suggest the obvious positions from the prior administrations that were held by talented and creative individuals devoted to a better Indiana. I am thinking of gubernatorial directors of public finance, directors of the Indiana Development Finance Authority, directors of the Indiana Toll Road Authority, and the cadre of careful bond and financial analysts I had the honor of serving with at the Indiana Housing Finance Authority. I am thinking of several attorneys in the Northern Indiana counties who are familiar with public finance. I am thinking of former state and local office-holders in the same counties. I am thinking of Democrats with recognized credentials in law, public finance, investment banking, leadership, public relations, and strategy.
I think Major Moves, which was approved by the House Ways & Means Committee on a party-line vote on Tuesday, will likewise be approved on party-line votes on second and third readings this week in the House. But it's a weird situation. Republicans barely know why they are voting aye. Democrats barely know why they are voting nay. Kevin Rader's story on WTHR-TV (Ch. 13, Indianapolis) illustrates the confusion in the House Ways & Means Committee on Tuesday.
The time and place to impose order is when HB 1008 enters in the generally more orderly confines of the Indiana Senate. For Democrats, the point persons must be the Minority Leader, Sen. Richard Young, D-Milltown, and Sen. Vi Simpson, D-Elletsville, who is the ranking minority member on the Finance Committee. They need to authorize development of a full-scale minority report, and charge a group of Democratic volunteers with the qualifications I named above to produce an authoritative interim report for presentation by Sen. Simpson to the Finance Committee. Another interim report should be ready -- with proposed ammendments -- by the time of second reading in the Senate. A final report should certainly be available to advise all members of the Conference Committee.
This assumes that a full-scale analysis can be readied in time for the short session to consider Major Moves. It is quite likely that the considered opinion of the experts will be to call for more time to study. This may relieve some very nervous Republicans as well as the Democrats and result in schlepping the entire question into an interim study committee that could meet during the summer and report to the 2007 long session. I know there is an intervening general election, but the governor's ham-handed use of brute force against the evident opposition of Hoosiers, especially in the North, could actually bring forth the Democratic House majority in the fall election that the governor fears. In other words, if he'd lighten up, he might preserve his majority and live to consider Major Moves in 2007 in the friendly confines of a GOP-controlled House and Senate.
A minority report would return to the days of the "Stan and Marilyn Show" of the 1980s, when a pair of confident and articulate young Democratic House members called in reporters regularly and mixed their views into the media message. A minority report would galvinize the Democrats. A minority report could conceivably endorse the privatization concept, if not the Daniels proposal itself. Or it might not. The point is to investigate and analyze, not pre-judge.
Democrats made a serious error in not following or analyzing the bid process for the Toll Road. The foreign press and the Northern Indiana papers seem to have followed the process more carefully than the Democratic leadership. Convening a minority report team could rectify that mistake and proceed further.
Questions I have:
- What does the RFP really say, line for line?
- Is the "winning" proposal responsive, in general if not in specifics?
- There have been a sufficient number of privatized toll roads around the world to build up independent analysts who have reviewed and proposedkey ratios that will reveal the quality of the "winning" proposal. These tools of analysis must be discovered and applied.
- The enabling legislation, HB 1008, needs to be scrutinized for its alleged "power grab" sections. I sense the ghost of the legendary Robert Moses of New York (see Power Broker, by Robert Caro) at work in this bill. The exchange between Democrats and Republicans during Tuesday's Ways & Means Committee makes it clear that the water-carrying Republicans are unclear about the water they carry.
- Due dilligence and quality of the companies involved needs to be closely monitored.
- From all this, an analysis or evaluation, as well as a recommendation, needs to be delivered to the Senate Democrats in time to be useful. If the report concludes the governor is on the right track, then Democrats should willingly vote with the GOP majority. If the report spots problems, Democrats will have a tool with which to make noise and steer the process into a more useful direction.
Democrats failed to stay on top of the bidding process. But two wrongs don't make a right. It would be wrong to use bluster as the chief tool for opposing Major Moves. A study by trusted experts would receive attention, be credible, and provide basis for rational policy positions to be taken by Democrats in both chambers.
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