The Indy Star had an article a couple of days ago on Mitch Daniels’ “Aiming Higher” PAC’s ad blitz in favor of the Toll Road privatization. The primary thrust of the article was to look at the PAC, its origins, and the sources of its money. But one of the things the article mentions is one of the PAC ads that contains the line “We’re only renting the highway. We’re not selling it.” I’ve heard this before from pro-privatization activists. It strikes me as, at best, a distinction without a difference and, more likely, wrong.
My property law teacher taught his classes to think of property as a bundle of rights one has in something. You can sell the bundle a piece at a time or all at once. When you rent a building you own, you are selling your right to occupy that building for the term of the lease. When you grant an easement, you are selling your right to exclude that person from your property. So, the proposed Toll Road deal is a sale. The State is selling its right to operate the road for the next 75 years. It is selling its right to collect tolls for the next 75 years. Probably most importantly, it is selling its right to make the road toll free sometime during the next 75 years. And, it is selling its right to upgrade U.S. 20 sometime in the next 75 years. And the fact that the sale is for a term of 75 years means that, from the perspective of those of us currently in our adulthood, it is functionally the same as a sale for eternity. Also, I suppose it’s worth noting that the agreement itself specifies that the transaction should be deemed to be a sale for tax purposes.
I think the Governor is hoping he can score public relations points with his somewhat dishonest foray into semantics and is hoping citizens won’t investigate the details and will be falsely reassured if the transaction is labeled a lease rather than a sale.
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