Officials: Payments to PennDOT drive relentless toll hikes on Pa. Turnpike
Frequent Pennsylvania Turnpike drivers might want to start stashing away some dough.
As the highway system’s debt nears $10 billion this year, partly because of hundreds of millions of dollars in mandated annual payments to PennDOT, turnpike officials said there’s only one viable option to cover increasing debt payments — annual toll increases of 3 percent to 5 1⁄2 percent.
“In order to maintain our bond rating, we will have to raise rates on an annual basis,” turnpike CEO Mark Compton said. “There aren’t any other options.”
Turnpike financial statistics show the debt ballooned since dipping to $2.18 billion in 2006. It reached $8.7 billion at the end of fiscal year 2013 and will be $9.5 billion when the 2014 fiscal year ends.
Transportation experts and politicians trace the turnpike’s predicament in large part to Act 44 of 2007, which requires $450 million in annual payments to PennDOT. The law originally called for adding tolls to Interstate 80 to simultaneously increase turnpike revenue. Federal officials rejected the tolling plan, but not before the turnpike dished out $750 million, $850 million and $900 million to PennDOT each year from 2008 to 2010. State officials lowered the payments to $450 million in 2011.
“Every year, the turnpike issues new debt to cover the payments, but borrowing isn’t the problem. Paying it back is the problem. In five years, the debt service will double,” said Frank Gamrat, a senior research associate at the Allegheny Institute for Public Policy who has studied the turnpike. “What we have found, even with all the toll increases, we’re seeing toll revenues increase at a decreasing rate. How much will the traveling public put up with before they find another way?”
Compton said his agency closely monitors traffic counts and is sensitive to that concern. But he said the turnpike has to be maintained.
“We’re asking our customers to pay a premium to ride the road, so we have to make sure it’s maintained well,” Compton said.
Some relief is in sight. The state transportation law passed last year, Act 89, cut the $450 million payments to $50 million a year in 2022. It hiked wholesale gas taxes and increased vehicle-related fees as part of a $2.3 billion package to fix the state’s crumbling roads and bridges and fund mass transit.
Steve Chizmar, spokesman for Gov. Tom Corbett, said Act 89 “helps the turnpike manage its long-term debt load, improves its financial outlook for rating agencies, and it allows the turnpike to focus on its own necessary reconstruction plans.”
Former state Auditor General Jack Wagner said he hoped the transportation law would have stopped the turnpike payments within two years. He issued an audit in January 2012 voicing concerns over the debt.
“I said then, and I continue to feel now, all it’s doing is putting them on a financial cliff. Soon, they are going to be in more debt than the value of the turnpike,” Wagner said. “The turnpike needs these resources. They can’t be turning it over an additional eight years.”
Turnpike drivers weren’t happy at the prospect of escalating tolls. The agency raised them for six consecutive years, including a 12 percent increase in January for cash-paying customers and 2 percent for E-ZPass customers. The agency hiked rates by 25 percent in 2009.
“It’s a racket. Live with what you have,” said truck driver Paul Mountain, 54, of Monongahela.
He said that he drives the turnpike once a week and it costs more than $250 to cross the state from Ohio to New Jersey. He said he avoids the turnpike when he can by driving I-80, routes 22 and 322, and other roads. He questioned why the turnpike couldn’t cut costs elsewhere, starting with pensions.
“(The tolls) just increase costs for everything. You have to pass it on to the customer,” Mountain said. “They have all those brand-new service plazas. What was the matter with the old ones?”
Other transportation experts, such as Martin Pietrucha at Penn State University, said if infrastructure needs to be fixed, repairs get more costly.
“If the need is there, in the long run, they’re saving money,” said Pietrucha, a professor of civil engineering and director of the Larson Pennsylvania Transportation Institute. “I think the only concern would be if interest rates change dramatically.”
Some lawmakers say the debt has stalled efforts to abolish the turnpike commission. State Rep. Donna Oberlander, R-Clarion, is one of the latest lawmakers to sponsor a bill to abolish the commission and have PennDOT absorb the agency. She pushed her bill because of a March 2013 grand jury presentment that detailed an alleged “pay-to-play” scheme in which companies’ campaign contributions and gifts helped secure lucrative contracts. The Attorney General’s Office charged eight people, including former turnpike CEO Joe Brimmeier of Ross.
“I really thought that was prime time for the bill because of the grand jury report. The debt was one of the larger issues, because that amount would have to be swallowed by PennDOT. That was a huge issue,” Oberlander said. “At this point, I don’t have much hope for (the bill).”
Bobby Kerlik is a staff writer for Trib Total Media. He can be reached at 412-320-7886 or [email protected].