Gov Rendell frustrated - alternatives to Penn Pike lease flout federal law

Gov Ed Rendell has not given up on his proposal for a lease concession on the Pennsylvania Turnpike, aides say, but they say he is frustrated by the inaction of the legislature. No bill to allow a concession has been filed. Instead there are multiple bills in play that purport to match the concession plan in fund raising. But they all depend on tolling I-80 and other interstates financed with federal tax monies. They run afoul of current federal law which only allows tolls that plow profits back into the road on which they were raised.

Federal law clearly prohibits precisely the kind of profitmaking from tollroads to support other roads or transit that many Pennsylvania legislators and the Turnpike Commission are touting.

The Harrisburg Capitolwire news service reported Rendell last week as saying in an interview he has "pretty much given up" on the lease concession after saying he still believed it was the best option: "In the palace of truth and justice we would lease that baby."

The news service quotes Rendell saying he would sign a House Democrat-proposed plan that raises tolls on the turnpike, begin tolling on Interstate 80 and increase the match local municipalities make toward transportation funding.

They also report him saying if the legislators don't come up with a viable alternative to a concession then he'll call them back into session in the summer to consider a concession.

"(A concession) is dead if they give me something before the summer recess. If they don't do transportation before the summer recess, then we're going to have a special session and I'm going to push very hard for both of my plans again."

Bills in play

Majority Whip Keith McCall's (Dem) bill, close to proposals by Joseph Brimmeier of the Turnpike Commission, would raise about $900m/yr ($500m for transit, $400m for highways) through borrowing via the Turnpike Commission secured by future toll revenues from the turnpike itself.

Tolls would rise 25% in 2010 and be increased annually with inflation.

Tolls would be imposed on I-80 at 35 points down the interstate which traverses the north of the state and carries heavy truck traffic between Ohio and the New York/northern New Jersey area. Those tolls would also be adjusted annually. Under this Turnpike Commission-sponsored plan the I-80 tolls would support transportation programs throughout the state by generating a surplus that could be pledged to support the borrowing. That clearly breaches existing federal law on tolling an interstate.

Another Democrat Dwight Evans chair of the appropriations committee wants to raise a variety of motorist fees and taxes including the gas tax. He also wants tolls on I-80.

The Republicans want to go even further with tolling interstates than I-80. They want to do all the longdistance interstates in the state starting with I-95 along the Delaware River, I-78 in central eastern PA, I-81 which runs northeast southwest through the middle of the state, and I-79 which runs north-south by Pittsburgh in the west.

Not one of these plans is legally viable.

Unlike the Turnpike itself which was built with bonds repaid by tolls, all the rest of Pennsylvania's interstates were 90% built with federal grants and on condition that they not be tolled. Various exceptions have been introduced over the years to the tolls ban on federally financed roads, but federal law clearly prohibits the kind of openended tolling of federally fiannced roads to finance a state's transit and road system envisaged as by the Turnpike Commission and its followers in the state legislature.

Present Federal law only allows tolling to manage traffic via variable pricing, conversion of HOV lanes to HOT lanes, and tolling to support improvements where toll surpluses are plowed back into the facility on which they are raised. Tolling interstates has to pass a number of other tests too, and is subject to approval by the US secretary of transport.

Legal detail

Specifically the Turnpike Commission's proposal violates the General Pilot Program Provisions regulations issued by FHWA under Section 1216(b) of TEA-21, which created the Interstate System Reconstruction and Rehabilitation Pilot Program. Specifically, the State must execute an agreement with the FHWA specifying that toll revenues received from the facility will be used in accord with the requirements of Section 1216(b)(5) of TEA-21. This requires that toll revenues be used only for (1) debt service, (2) reasonable return on investment of any private person financing the project, and (3) any costs necessary for the improvement of and the proper operation and maintenance of the toll facility, including reconstruction, resurfacing, restoration and rehabilitation of the toll facility. Additionally, the agreement with FHWA must provide that the State will conduct regular (preferably annual) audits to ensure compliance regarding use of toll revenues.

The Pennsylvania delegation could try to get federal law changed. The Bush administration might or might not object.

But House transport chair James Oberstar (Dem) is as much an enemy of tolls as he is of private concessions. While there is little he can do to block concessions, Oberstar could, and we'd guess, would, block changes in existing law to allow tolling of interstates in Pennsylvania for general transport revenue purposes.

Word for word

Section 1216(b)(5)(A) of TEA-21 contains the relevant toll revenue restrictions for this program.
 
(5) Limitations on use of revenues;  
        audits.--Before the Secretary may permit a State to participate  
        in the pilot program, the State must enter into an agreement  
        with the Secretary that provides that-- 
                    (A) all toll revenues received from operation of the  
                toll facility will be used only for-- 
                          (i) debt service; 
                          (ii) reasonable return on investment of any  
                      private person financing the project; and 
                          (iii) any costs necessary for the improvement  
                      of and the proper operation and maintenance of the  
                      toll facility, including reconstruction,  
                      resurfacing, restoration, and rehabilitation of  
                      the toll facility; and 
                    (B) regular audits will be conducted to ensure  
                compliance with subparagraph (A) and the results of such  
                audits will be transmitted to the Secretary. 
            (6) Limitation on use of interstate maintenance funds.-- 
        During the term of the pilot program, funds apportioned for  
        Interstate maintenance under section 104(b)(4) of title 23,  
        United States Code, may not be used on a facility for which  
        tolls are being collected under the program. 

TOLLROADSnews 2007-06-25 ADDITIONS CLEANUP 2007-06-25 09:20 ANOTHER ADDITION 2007-06-26 15:30