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Proposal would expand public-private partnerships

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Private firms may soon be able to build, abolish, or repair state facilities – and also operate them.

Current law allows private firms to partner with the state to build or operate highways, rail lines, or bridges. The projects could involve the private firm giving the state an upfront sum in exchange for future toll revenue. Or they could make other financial arrangements that give the private companies a profit.

Under Senate Bill 225, authored by Sen. Luke Kenley, R-Noblesville, the facilities would not be limited to transportation. Firms could construct correctional, mental health, regional health and some communications facilities.

Sen. Karen Tallian, D-Portage said Thursday the bill appeared to allow these firms to contract facilities without permission from the General Assembly.

“I don’t think we’re extending anything. We’re just making it simpler to do these things,” Kenley said.

But Tallian said she “respectfully disagreed” with Kenley’s analysis.

“I’m still a little bit – well I’m still a lot – concerned about not having to come back to the legislature if you’ve got some big project plans,” Tallian said. “If you’ve got some big project to build a new prison with a third party – I have a problem with not having to come back to the legislature.”

She also disapproved of firms being allowed to operate the facilities rather than the state.

Kenley worked with the Indiana Finance Authority to create the bill to expand the use of public-private partnerships, which are called P3s.

“I think the intent here that we had was to allow us to use the P3 model as an additional procurement method to bond financing facilities” for prisons, said Andrew Kienle, general counsel for the Indiana Finance Authority.

Kienle also said existing law requires a public-private partnership to get State Budget Committee approval to move forward.

“Let me just say, directly and unambiguously, that it’s not the intent that this would authorize us to just go out and do projects without asking the legislature,” Kienle said.

Tallian said she “had a whole discussion yesterday about between what’s intended and what’s written.”

“It’s unfortunate this bill has a whole lot of good things I could support, but it’s got this big red flag (and) I can’t support the way it is here,” Tallian said. “I would be very happy to support everything else in here except the P3 stuff because I think it needs some major explanation.”

Kenley stood his ground on removing the public-private partnership amendment from the bill completely, but he agreed to amend the language – in an effort to make it more clear – and bring it back to the committee at a later date.

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  • And not even to the highest bidder
    I just don't get why the majority of the voters don't understand that, with few exceptions, these P3s are just another way for the rich to make more money at the expense of the public. Allowing the private sector own and operate prisons is just ridiculous. If the politicians won't take responsibility for something so important as imprisoning people, what can they be trusted to do properly?
  • Except for one detail
    The whole reason private companies get involved in these "partnerships" is that they're a sure thing--the government and taxpayers almost always absorb most or all of the financial risk in these deals. It's a subterfuge, so that allegedly "fiscally conservative" politicians can lay blame for fee-increases somewhere else by doing them through a cut-out like a "private-public partnership." And make no mistake, "private-public" is correct, not "public-private" because these deals rarely have any long-term benefits to the public at large, and usually serve as means to funnel government revenue into the pockets of well-heeled private interests.
  • Blurred Line Is Not Good for Public
    The line between private enterprise and government continues to get blurred by these arrangements. Proponents never clearly identify the benefits and who receives the benefits when these arrangements are pursued. Sure, they say that this is a good thing but stop short of identifying the real beneficiaries. All projects have capital costs and operational costs regardless of who funds them. Why do I think the public loses when the private side both helps fund and manages the project. Private keepers of the public interest too often fumble the ball either deliberately or through incompetence. Lets keep the line more clear.
  • This could work IF...
    there aren't any revenue guarantees. Revenue guarantees take the whole "investment" for the private company out of the question, thus saddling the burden for any operating losses on the taxpayers.
    • This is perfect
      It appears when the r's talk about private public partnerships, it means the public pays, and the private sector reaps the financial benefits. When does the public when with this trickle down ecomomy thought process.

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