Thursday, December 29, 2016

Trump may not submit a budget


Well that would be one way to get around the sequestration; and leave all the Public-Private Partnerships off-budget in the future because they would use Accrual rather than the usual government Modified Accrual and would collect tolls/fees rather than taxes...

Here's a perhaps relevant section of USC which identifies the authorized Federal participation in roads/bridges, etc which might be helpful in trying to figure out what these guys have up their sleeves:

23 U.S. Code § 129 - Toll roads, bridges, tunnels, and ferries

(2)Ownership.—Each highway, bridge, tunnel, or approach to the highway, bridge, or tunnel constructed under this subsection shall— 
(A) be publicly owned; or 
(B) be privately owned if the public authority with jurisdiction over the highway, bridge, tunnel, or approach has entered into a contract with 1 or more private persons to design, finance, construct, and operate the facility and the public authority will be responsible for complying with all applicable requirements of this title with respect to the facility.


7 comments:

Penguin pop said...

Anything to get the Paul Ryans and the Mitch McConnells off his case, I guess.

Matt Franko said...

Exactly...

And he will never tell you what his real plan is... he is going to be a tough nut to crack...

Bob said...

His plan is PP partnerships. They have a less than stirling reputation.

Matt Franko said...

Not for the private partners...

Revenues (tolls) usually fall short from the predicted ;) levels from the public perspective...

Private managing partners get paid first... then send the balance to the public partner..

Its all illustrated in Accrual in the proposal stage because there is a private entity involved... so its Accrual both on the left and right side... with tolls instead of taxes as revenues...

If you just use public approach then you have to use Modified Accrual basis and it never looks as good with that as they accrue the right side and use cash basis on the left... so the budget people have a shit fit when they look at it thinking it is plain Accrual...

Its a built in bias towards the public-private option via the different accounting options...

Tolls look better than taxes....

Bob said...

Then look again. Who is bearing the risk in these fiascos?

Matt Franko said...

Well not the private partner because they dont put in as much...

There are several of these roads in my area and I drive them regularly...

All automated via EZ-pass.... the private people put in the electronics and back office and the public puts in the road... you drive thru the aperture and your account gets debited for a few dollars and they automatically re-load your account via etf when it gets low... no human beings involved it is a munnie machine...

There is not much risk as the roads are traveled and tolls are generated... the risk is under performance from what was predicted... usually it is enough to pay the private partner and the road maintenance for sure but maybe not the public partner all that was projected...

For Trump he can go in and make rosy projections and it will look a lot better than if it was a normal "tax and spend" Modified Accrual government accounting that always shows larger "deficits!" ... so he will get the deal...

Schofield said...

O & R (O'Connell and Ryan) rent-seekers to the socioeconomic elite. You know where to find us.