Act 44 has opened with an ugly scene.
The move to toll Pennsylvania’s I-80 appears to be a promising one, but Gov. Ed Rendell would rather see private investors move in to the Pennsylvania Turnpike. The means to an end is creating quite a fight in the Keystone State.
In mid-May Rendell announced a winning bid for the Pennsylvania Turnpike—a $12.8 billion package delivered by a team including Citi Infrastructure Investors, Abertis Infraestructuras and Criteria CaixaCorp. At press time the leasing was pending approval from the state’s general assembly.
“We urgently need new funding for road and bridge repair,” said Rendell. “The turnpike lease will help us meet that need. Where Pennsylvanians will see a major difference is on our other roads. Road repair all over the state will accelerate and we will be able to cancel [Act 44] to impose tolls on I-80.”
The Pennsylvania Turnpike, however, believes Act 44 deserves more airtime. According to Turnpike Commission CEO Joe Brimmeier, Act 44, which still needs federal-government approval, “has already begun to address our transportation funding crisis.” Over the past nine months, Brimmeier claimed, the tolling move has provided PennDOT with $750 million in new revenue for road, bridge and mass transit projects. The Turnpike Commission also predicts Act 44 would create $84 billion over 50 years without raising taxes and with the state retaining control of the thoroughfare, which makes it far more attractive than leasing the turnpike to a private conglomerate. The Turnpike Commission also has the ability to borrow at interest rates that could be lower than that of the private sector.
Carl DeFabo, a spokesperson for the Pennsylvania Turnpike Commission, refused to say much on record. “Right now we are going to let this play out in the general assembly and see what happens,” he told Roads & Bridges.
The state, however, believes if done right the 75-year lease of the famous highway would create payments averaging 13% more than the maximum available under the I-80 tolling plan.
The leasing agreement carries a cap on tolling. There would be a 25% increase in 2009 and a 2.5% bump thereafter. Inflationary increases also could be made. Act 44 places a similar 25% increase in ’09 and a 3% raise thereafter that could be higher if operating expenses increased above expectations or if traffic volume decreased. The lease operator would be required to maintain terms and conditions of the current turnpike workers’ collective bargaining agreement. However, once it expires it would be up to the operator to renew. A 10-year capital investment plan that would lead to turnpike improvements also would be implemented under the private deal. All upgrades must meet strict quality standards for the entire life of the lease. In addition, annual, independent audits will be conducted through PennDOT to ensure compliance of the agreement.
If the lease were approved by the general assembly, Act 44 would be repealed.
