Turnpike Debts Driving up Tolls

By Eric Boehm | PA Independent

HARRISBURG — Auditor General Jack Wagner on Tuesday accused the Pennsylvania Turnpike Commission of using “flim-flam financing” to pay off its $7 billion debt.

But Roger Nutt, CEO of the commission, said its finances are sound — as long as it increases tolls for the next decade and beyond.

And if the motorists don’t pay, Wagner said, “that debt is guaranteed to be paid … by the taxpayers of Pennsylvania.”

Wagner told a joint hearing of the House and Senate transportation committees that the turnpike’s unsustainable debt, which is spiraling out of control, will drive up tolls and eventually drive motorists away from the turnpike completely.

Nutt argued that the tipping point — when increased toll revenue is cancelled out by drivers diverting to other roads — will never occur, referring to the turnpike’s own forecasts that consider gas prices and the additional travel time of diverting to other roads.

But Wagner said that tipping point will arrive sooner than later as the turnpike is on pace to be the most expensive toll road in the United States, when its next toll increase takes effect in January 2013.

The commission is crippled with this debt because of Act 44, which Wagner wants to repeal.

The 2007 law allowed the turnpike to take on more debt in exchange for providing the state with $450 million annually.  To meet that obligation, the turnpike increased its debt by more than 181 percent since 2007 and has raised tolls for the past five consecutive years.

However, the joint transportation committees are not considering any proposals to reform or repeal Act 44.

“We want to see what we can do as a Legislature to help address the financial obligations of the Pennsylvania Turnpike and meet the needs of PennDOT,” said state Sen. John Rafferty, R-Montgomery, chairman of the Senate Transportation Committee.

State Rep. Bill Kortz, D-Allegheny, said Pennsylvania’s motorists cannot handle ever-increasing tolls.

“At some point there is going to be some diminishing returns” if tolls continue to increase as drivers seek alternate routes, he said.

Since Act 44’s passage, tolls have increased 31 percent for drivers using the electronic EZ-Pass system and 44 percent for drivers paying cash.

PennDOT uses the $450 million in toll revenue to pay for highway and mass transit projects statewide. Any remaining toll money pays for the upkeep of the turnpike operated by the Turnpike Commission.

State Rep. Dick Hess, R-Bedford, said a solution must involve other drivers and mass transit users.

“Can’t be all on one entity when the other two entities are receiving funding,” he said.

Wagner has been warning about the turnpike’s debt since January, but lawmakers have been slow to respond. Many say any efforts to reform or repeal Act 44 must coincide with an overall transportation funding package, something they are waiting for Gov. Tom Corbett to endorse publicly.

State Rep. Rick Geist, R-Blair, chairman of the House Transportation Committee, said the turnpike had asked for Act 44 to be passed and brought the debt problems upon themselves.

At the time, the commission expected the federal government to approve tolls on Interstate 80, which would have boosted its revenue and prevented the need for more borrowing. That plan, Geist said, was a mistake from the start.

“I agree that Act 44 needs to be rewritten,” he said.

State Sen. John Wozniak, D-Cambria, minority chairman of the Senate Transportation Committee, said the turnpike’s practice of borrowing $450 million annually was not sustainable.

“Tolls keep going up and it’s clear we can’t maintain the status quo forever,” he said.

Contact Eric Boehm at Eric@PAIndependent.com and follow him on Twitter @PAIndependent.