Pennsylvania Turnpike defends financial position

By David Tanner, Land Line associate editor | 8/28/2012

Officials with the Pennsylvania Turnpike Commission are defending their financial position in response to recent reports indicating the agency is $7 billion in the red. 

“I reassure you, there is no looming financial crisis at the Turnpike Commission,” CEO Roger Nutt said Monday, Aug. 27, in a statement released to Land Line. “We continue to receive favorable bond ratings, and we fully intend to meet all funding obligations to PennDOT – as we’ve done for the last five years.”

Back in January, the state’s auditor general, Jack Wagner, said the Pennsylvania Turnpike Commission was “drowning in debt” largely because of the controversial state law known as Act 44 of 2007.

Under Act 44, the agency must pay $450 million each year to the Pennsylvania Department of Transportation, which spends it on transportation programs unrelated to the Turnpike, such as mass transit.

Lawmakers who approved Act 44, including then-Gov. Ed Rendell, were confident at the time they could convert Interstate 80 into a toll road to meet the annual $450 million obligation. They hadn’t counted on public outcry against the toll plan or the federal government’s dismissal of the state’s application.

The Federal Highway Administration stated at the time that Pennsylvania officials could not prove that 100 percent of the toll proceeds would stay with the highway – something that Pennsylvania officials have attempted to rebut but to no avail.

Without I-80 as a funding source, the Pennsylvania Turnpike Commission has raised tolls several times to keep up with the Act 44 obligation. Recent reports along with the auditor’s report in January suggest that those toll increases are not keeping up with expenses.

In July, the commission approved a 10 percent increase for cash-paying customers and a 2-percent increase for those using E-ZPass. The agency also lowered some E-ZPass fees as an incentive to get more customers to use the automated system for toll collection. The agency anticipates operating an all-electronic collection system in five years.

In recent years, the turnpike has generated about $800 million a year in tolls, which is spent on turnpike operations, roadway and facilities maintenance, the Act 44 obligation, salaries, and administration.

In related happenings, Pennsylvania House and Senate lawmakers are scheduled to have a joint committee hearing on the topic of debt in late September. A spokesman for the Pennsylvania Turnpike Commission says he wonders if the recent round of “debt” stories has something to do with that upcoming hearing.

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