A controversy is developing in Pennsylvania over how best to collect enough money – $1.7 billion right away and more later – to make highway improvements, repair bridges and satisfy other highway infrastructure and mass transit needs.

The money apparently will be coming from travelers along the Pennsylvania Turnpike, but there’s still disagreement whether they’ll have to pay their fees to a public-private partnership as is being promoted by the U.S. Department of Transportation Federal Highway Administration or to toll collectors along Interstate 80 from New Jersey to Ohio.

“The concern should be focused on the federal government’s failure to fund infrastructure projects appropriately, and to fund highway projects in particular,” Chuck Ardo, press secretary for Pennsylvania’s Democratic governor Ed Rendell, told WND in a telephone interview.

Rendell has joined the growing list of state governors who are exploring plans to lease state toll roads in a move to boost highway revenues.

He has applied to be the third state under a U.S. DOT pilot program to be allowed to place tolls on an interstate highway, in this case the 311-mile section of I-80 from New Jersey to Ohio.



Virginia was the first state to be given Phase One approval by the U.S. Department of Transportation to toll interstate highways under Section 1216(b) of the Transportation Equity Act for the 21st Century, or TEA 21.

The Missouri Department of Transportation faxed to WND documentation that Missouri has been accepted as the second state to qualify in the program.

In Dec. 2007, the Federal Highway Administration returned Pennsylvania’s application for the third slot, posing new questions and asking for additional information.

Rendell’s motivation is not to find funds to cover a state budget deficit. Unlike some 24 states that are today facing combined budget deficits of some $34 billion, Rendell was able to announce in his budget address on Feb 5 that Pennsylvania this year anticipates a budget surplus of some $427.5 million, despite a slowdown in the economy nationally.

Instead, Rendell’s motivation is to find a way to boost state funds available for highway maintenance and improvements, including repairing bridges, and to make investments in mass transit.

The Pennsylvania Turnpike Commission has a $3 billion debt which does not appear on the state budget since the commission is an independent state agency not directly under the governor’s jurisdiction.

At issue in Pennsylvania is a piece of legislation, Act 44, passed by the state legislature in July 2007, that obligates the state to find a way to fill a $1.7 billion revenue gap the Pennsylvania Department of Transportation faces to operate, maintain and improve the state’s highways and develop mass transit.

In 2006, a bi-partisan Transportation Funding and Reform Commission issued a report requiring the governor to find a way to bear the cost of a $1.7 billion package to address the backlog of deteriorated bridges and other transportation issues.

“The governor has been emphatic about finding at least $1 billion to help fund the Commonwealth’s transportation funding needs,” Ardo told WND. “Act 44 was a compromise sent to the governor by the legislature after his proposal to lease the turnpike failed to gain traction.”

Under Act 44, the Pennsylvania Turnpike is mandated to hand over $750 million to PennDOT in 2008, plus another $850 million in 2009, with future payments increasing about two and a half percent a year thereafter.

Still, the Pennsylvania Turnpike Commission has reservations about giving up any control.

“We don’t favor turning the Pennsylvania Turnpike into a private entity through a PPP lease,” William Capone, the director of communications for the Pennsylvania Turnpike Commission, told WND in a telephone interview.

“If we keep the Pennsylvania Turnpike in the hands of a public entity, we believe we can actually invest more dollars into roads than a private corporation could do,” Capone explained.

“Through tax-exempt financing, we can borrow money cheaper than a private corporation,” he said. “Besides the Pennsylvania Turnpike Commission is not profit-driven, so we don’t have to generate profits to pay shareholders the way a PPP would have to operate.”

Capone explained the Pennsylvania Turnpike Commission would prefer a “public-public partnership” in which the commission would be allowed to collect tolls on the highway. Gov. Rendell, meanwhile, remains hopeful that DOT will approve the state’s application to collect such tolls.

But contingency plans are being assembled, too.

“We are hopeful the application will be approved, but we continue to explore the lease option,” Ardo stressed. “We believe leasing the Pennsylvania Turnpike would generate more dollars more quickly, plus pursuing this option insures we have a plan in place should DOT not approve our tolling proposal.”

Ardo confirmed Rendell’s office is still exploring the Turnpike lease proposal and anticipate getting bids to present to the legislature within the next several weeks.

“We disagree with the Turnpike Commission on this issue,” Ardo said, “and we intend to explore all the options we have to meet our highway funding and mass transit needs.”

A plan to lease the Pennsylvania Turnpike under a PPP contract would yet require enabling legislation to be passed by the state legislature.

The Pennsylvania Turnpike, now in operation for 67 years, opened on Oct. 1, 1940, and was the nation’s first limited access, high speed turnpike.


 


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