WV legislature claims power to control tolls on Turnpike

The Turnpike is I-77 for its whole length and I-64 also for part of its length Plaza A in the far south of the state Gov Joe Manchin

A political battle has been raging in the West Virginia capital of Charleston over whether the state's Parkways Authority - which supposedly runs the state Turnpike - should be able to set tolls. A lot of politicians especially from the south of the state, the area served by the Turnpike, want to have veto power over toll rates. And they appear to be getting their way.

Governor Joe Manchin (Dem) says toll rate setting should be left to the Parkways Authority board whose members are appointed by the state but whose term of office gives them a degree of independence. Manchin says the ability to raise capital in the bond markets will be jeopardized by legislative control.

It's an argument as old as toll revenue bonds - bonds sold on the security only of prospective toll revenues which go back to the establishment of the Maine Turnpike Authority in 1947.

Independent boards not directly answerable to the governor or the legislature get denounced as a power-unto-themselves. Their independence tends to erode

Investors think that politicians will tend to give priority to popular moves to keep toll rates low over setting tolls at a level more conducive to the longterm financial health of the tollroad. Bond rating agencies have therefore urged states which want to borrow for new roads or major rebuilds to leave toll rate setting to an independent board of directors of a toll agency on the basis that they will take the longer view. It makes the bonds easier to sell and their interest rates lower.

Over the last few weeks the struggle has been on in the WV legislature. The House of Delegates voted for a Turnpike bill leaving toll rate control to the Authority but the state Senate voted 31/2 to give the legislature veto power.

The authority's bond counsel says that the legislative veto will effectively emasculate the board and that bondholders will have the legal right to "call" or demand repayment of outstanding bonds.

"Nonsense," claim supporters of the legislative veto. "As long as the bondholders are getting their checks each quarter they are happy."

At the weekend the veto proponents appeared to have won. A conference committee voted to settle on the Senate version of the bill and the House caved in and voted for it 96/2.

Question now is whether the governor will veto the bill.

Prospects are slim.

Toll increases rolled back last year

The Authority raised tolls last in late 2005, but that set off a firestorm of denunciations and demands for a legislative veto power. A court held that the authority board had not made proper notification of the toll increase proposal and the toll increases were cancelled. Third laning and new interchanges are on hold.

The authority has also been criticized for its involvement in various 'economic development projects' and in an arts and crafts center called Tamarack - all of which activities it was instructed to perform by the legislature.

The Authority board will likely set tolls under the shadow of legislative veto.

TOLLROADSnews 2007-03-12