Former FHWA official dishes on Pennsylvania, I-80

| 12/9/2009

A former Federal Highway Administration official says Pennsylvania’s application to toll Interstate 80 has been a square peg from day one and deserves to be rejected.

Marcus Lemon, appointed in 2007 by President Bush as chief counsel for the FHWA, said his department had good reason not to grant Pennsylvania’s application acceptance into the Interstate System Reconstruction and Rehabilitation Pilot Program.

“The problem that you run into with a program like this is that sometimes you have applicants that attempt to fit themselves into the program that don't necessarily meet all of the criteria,” Lemon told Land Line Magazine.

“That was the problem that was encountered with Interstate 80 throughout the application process, which goes back a few years.”

Lemon, now an attorney with the Washington, DC, firm Baker & Miller, said state officials have not been able to make a case for tolling authority in the wake of a 2005 study that found I-80 in good condition.

“Interstate 80 has gone through a number of upgrades and repairs in recent years, and there really is an engineering question – under the program that they applied through – as to whether or not it really needs to be reconstructed.”

Back in 2007, Gov. Ed Rendell signed a controversial bill into law known as Act 44. The law put I-80 into the hands of the Pennsylvania Turnpike Commission and instructed the commission to develop the toll proposal.

Act 44 also put the Turnpike Commission on the hook to pay billions to the Pennsylvania Department of Transportation for 50 years – with or without I-80 tolls – to fund transportation programs, including mass transit.

Lemon points out that Pennsylvania’s penchant for diverting highway funds to mass transit and other uses does not bode well for the application to convert I-80 to a toll road.

“In this case it seems like they’re trying to back into it,” he said. “In other words, they’ve developed a feeling about their budget needs financially. And they’re saying this is how much money we need to come up with for the transportation budget, so let’s go toll this road to make the money. That isn’t the way to approach it.”

The better approach, Lemon believes, would be for Pennsylvania to study a roadway that needs to be reconstructed – he cited I-95 as an example – and formulate an application based on that need.

Pennsylvania Turnpike Commission Spokesman Bill Capone said he respects Lemon’s opinion but said the former FHWA counsel misses the mark on the state’s intentions.

First, Capone says people misinterpret Act 44 or don’t understand that the money from I-80 tolls would be required to stay with the roadway and not be diverted to other means.

“The money that’s coming from an I-80 toll road is going to be put back into the road,” Capone told Land Line.

“We’re going to spend $250 million a year, and that’s four times the current amount, to upgrade the roadway and its bridges.”

True, Capone says, the money that would have gone to I-80 would be freed up to pay for other things.

The proposed tolling of a federal highway continues to raise the ire of truckers who pay substantially in fuel taxes and user fees to keep America’s freight moving.

In 2007, the Owner-Operator Independent Drivers Association staged an anti-toll rally on the statehouse steps in Harrisburg. The event attracted state and federal lawmakers up in arms about the proposed “double tax” on highway users that a toll would pose on top of state and federal fuel taxes.

Capone addresses the issue of double taxation.

“If you travel the Pennsylvania Turnpike or any other road in a state that calculates IFTA, you pay tax on the gas you consume regardless of the road you are using,” he said.

Next, Capone said the Turnpike Commission takes exception to media reports that refer to the I-80 application as a failure or a rejection.

Lemon, on the other hand, has no problem using the word rejection.

“It’s viable because the reality was that the application as it was provided was rejected, and it was rejected because it was not accepted,” he said. “It was not approved.”

Lemon, whose tenure expired when the Bush administration left office, believes the latest version of the application lacks fundamentals.

“Viewing everything in totality, my legal opinion would be to reject the application again, indicating to them that they would need to obtain a more clear, comprehensive and reliable traffic and revenue study.”

The Pennsylvania Turnpike Commission and PennDOT hoped that hiring Provident Capital Advisors could provide that missing piece in the form of the traffic and revenue numbers.

Lemon and others have been critical of Provident and its findings.

“If we start accepting a flimsy financial analysis from companies that two weeks ago were in the business of dealing with jails and health care, that are now capital advisors on highway traffic and revenue studies, what we do is lower the bar,” Lemon said.

Capone defends the choice to use Provident.

“What we’re seeing is that a lot of people that oppose the application are coming out of the woodwork and grasping on to these things to discredit the process,” Capone told Land Line.

“Our position is that the firm was picked because it had no ties to the turnpike or PennDOT, and the analysis stands on its own.”

The Pennsylvania application is currently being evaluated by the Obama administration, specifically FHWA Administrator Victor Mendez and staff.

Mendez told OOIDA leadership in October that the administration has vowed to evaluate each tolling application on a case-by-case basis without favoritism.

Lemon has offered an idea should the FHWA accept I-80 into the tolling program. He believes that federal and state fuel taxes should be removed so truckers and others are not taxed twice for the miles they run on the roadway.

“There are many people who oppose (tolling), and they view that as a double tax. They feel that they’ve already pay tax through their fuel purchase at both the state and federal level. They don’t want to pay a tax through a toll, and that’s understandable,” he said.

"So we need to have good projects that are financially viable that lead to an ability for us to point to an example of a good tolling project," he said. "And (we could say) here’s why we should eliminate the federal and state fuel tax because the user can pay for the facility and its upkeep through their toll.”

Lemon is far from being anti-toll. He specializes in public-private partnerships for his law firm.

By his own admission, he would rather see the Pennsylvania Turnpike leased to private investors than have I-80 converted into a toll road. He told Land Line that he views the 2006 lease of the Indiana Toll Road to Cintra-Macquarie as a sound financial move for Indiana.

– By David Tanner, staff writer