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Pa. auditor general says turnpike finances ‘nonsensical, unsustainable’

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Steph Chambers | Tribune-Review
Turnpike employee Michael Fontanazza, who supervises the New Stanton exit, monitors traffic moving through EZ Pass and full service lanes on Tuesday, Feb. 2, 2016.

HARRISBURG — Spiraling debt and “unrealistic” revenue projections spell potential financial trouble for the Pennsylvania Turnpike Commission, a state audit released Tuesday shows.

The toll road might be pricing itself out of business, the audit suggests. As a variety of financial pressures play out, “at some point, people will refuse to pay the toll and start looking for alternative routes,” Auditor General Eugene DePasquale said in Pittsburgh about the 2014-16 performance audit of the turnpike.

“In short, this means the turnpike must continue to raise rates every year, and it must increase the number of vehicles that use the roadway by historic levels,” DePasquale said. “There’s no way more people are going to use the turnpike and pay more and more money to do it.”

The agency has borrowed more than $5 billion since a 2007 transportation law required the turnpike to turn over $450 million annually to PennDOT through 2022.

Its debt is $11.5 billion, an agency spokesman said.

Sean Logan, the commission chairman from Plum, said commissioners agree with DePasquale “that our mounting debt, due largely to payments to PennDOT, is a growing concern.” He says he has directed staff to conduct a comprehensive review of capital spending to make sure projects are affordable.

The turnpike’s rebuilding plan was already reduced by $1 billion for the next 10 years, the audit said.

The commission based its financial plan on “some alarming projections from an outside consultant,” DePasquale’s office said.

The turnpike’s financial plan predicted the 44 percent boost in traffic volume and a 215 percent increase in toll revenue through 2035, auditors said. The report did not identify the consultant.

DePasquale later said it was CDM Smith, a global consulting company. The company’s spokeswoman could not be reached.

Traffic volume has remained relatively flat over the past decade, the audit said.

“This is where it gets even more unrealistic,” DePasquale said. “You can’t cut back on construction and increase traffic 44 percent, especially while jacking up the toll rates.”

If turnpike bondholders cannot be paid, taxpayers ultimately would be responsible, the auditor generalo said. He does not believe it will come to that.

The audit concludes that the turnpike commission is relying on longshot projections to remain financially sound and bond rating agencies are watching closely.

“It’s nonsensical. People aren’t going to pay to sit on the turnpike parking lot” as turnpike improvements dwindle, DePasquale said. “The entire projection is simply unsustainable.”

Logan said, “I deeply appreciate the auditor general’s thorough review along with the recommendations he made. We remain committed to improving our operations to become more efficient while providing safe, efficient travel for our 500,000 daily customers.”

Meanwhile, toll violations for motorists who don’t pay when exiting the turnpike have steadily increased since 2011. DePasquale urged legislative action to suspend a violator’s Pennsylvania vehicle registration until tolls and fees are paid.

In 2015-16, drivers failed to pay $61.3 million in tolls and fees, and $3.2 million remained uncollected by the end of the 2015, the audit found.

Brad Bumsted is the Tribune-Review’s state Capitol reporter. Reach him at 717-787-1405.

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