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.
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.
“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.
“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.
“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.”