Mass Pike board defers toll rate discussion two weeks - but big increases inevitable

Facing a financial crisis the Massachusetts Turnpike Authority (Mass Pike) board yesterday decided to defer a decision on new toll rates for the metropolitan segment of the Turnpike to a special meeting to be held October 4. But the board got a presentation from staff showing the dire financial straits in which the Authority's MHS (Metro Highway System) unit finds itself. The 25c/50c (mainline/tunnel) toll increases planned for now back in 1999 are completely inadequate the presentation shows.

The 25c planned increase on the MHS Turnpike mainline represents a 33% increase in the 75c transponder toll for cars and a 25% increase in the $1.00 cash toll. The 50c planned increase in the tunnel tolls represent a 20% increase in the $3 transponder toll for cars and a 17% increase in the $3.50 cash toll. Commercial vehicles pay higher tolls by a multiple.

At present rates the MHS is bringing in $152m comprising IC15 $20m, Boston Ext $63m, tunnels $68m.

At planned new toll rates with the 25c/50c increases it would bring in $176m, comprising IC15 $25m, Boston Ext $79m, Tunnels $73m.

The Massachusetts Turnpike though it has a single staff is for legal and accounting purposes two entities: (1) MHS east of MA128/I-95 including the eastern end of the Turnpike I-90 24km (15mi) long including the Ted Williams Tunnel, and two older harbor toll tunnels and including the untolled Big Dig (2) Western Turnpike I-90 198km (123mi) comprising all the Turnpike west of MA128/I-95 to the New York state line.

Without major toll increases the Turnpike's MHS system is unable to meet its legal commitment to bondholders to maintain the system "in good repair, working order and condition..." or to maintain pledged debt coverage ratios, the presentation says.

Toll revenues of the MHS projected with the 25c/50c toll increases for 2008 are now only $176m compared to 1999 projections of $203m. At the same time MHS operating expenses are $103m compared to 1999 projections of $77m. Non-toll revenues are higher than expected and debt service cost at $100m is on track. Trouble is the MHS, after the presently planned 25c/50c toll increases will only generate $95m before debt service compared to the projected $135m. And debt service alone is still $100m/yr.

Cost overruns have occurred in security, health insurance, pensions, utilities, property insurance and reallocation of some WT costs to the MHS.

Revenue is down because of:

- delays to the last toll increase
- 9/11 and a slow economy early in the decade
- unanticipated transponder discount
- delays in opening the CA/T (Big Dig)
- the ceiling collapse in the CA/T

Toll revenue actually declined last year as compared to 2005 because the tunnel ceiling collapse forced traffic to use other routes than the Turnpike or to cancel trips.

The Turnpike presented the board with a $51m/yr capital plan of $256m for the five years 2008 to 2012:

- working over 16 deficient bridges at a cost of $144m
- tunnel rehab $83m
- toll plazas refurbishment $17m
- roadway repairs & median barrier $13m

An Option A presented to the board involves 50c/$1.00 (mainline/tunnels) toll increase. (Mainline of NHS is IC15 plus Boston Extension) The 50c increase in Mainline tolls for cars is a 67% increase for transponders and 50% increase for cash at the Turnpike and 60% and 50% more at the tunnels. Commercial vehicles have their tolls doubled under this plan. A 5-axle tractor trailer pays $5 at the Turnpike Mainline and $15 at the tunnels. Taxis get their tunnel tolls increased less (56%) for a $7 toll.

This produces $218m total, $42m more than the planned increase and $66m more than now. $218m would cover none of the capital program but fully cover operating costs and debt service.

Much the same result is obtained with Option B in which transponder tolls for cars are raised by the planned 25c/50c (mainline/tunnels) but the cash tolls are hiked 75/$1.50.

To fund the capital program out of tolls with revenues of $253m most toll rates have to be doubled. Turnpike mainline transponder tolls go to $1.50 at each of the mainline plazas and to $5 at the tunnels for cars. For the tractor trailer of 5 axles the tolls would be $5 mainline and $15 at the tunnels.

Other possibilities for raising toll revenues mentioned are:

- dropping the transponder discounts
- dropping the resident discount
- reinstating tolls at IC16 in Newton where the toll busting governor William Weld did his sledgehammer act for TV back in 1996 opening up a stretch of the Extension for free travel.

Turnpike spokesman Mac Daniel says the board decided to examine cost savings over the next two weeks in order to make the increases in tolls more reasonable and palatable to the public.

Economies being studied will be:
- charging the state for police costs
- reduction in staff
- other economies of various kinds

Staff presentation is downloadable here.

Toll I-93

COMMENT: Best suggestion made during the meeting was from board member Mary Connaughton - that fairness dictates the burden of tolls should be shared with north-south traffic by tolling I-93. It has always been weird that the Turnpike has loaded all the burden of supporting the Big Dig onto east-west traffic when major beneficiaries of this expensive project are north-south travelers.

They could install all-electronic highway speed electronic tolling - no cash collection.

At 170k veh/day an average $2 toll would raise $122m/yr. Taxpayers at last would get some return on the huge investments made in the biggest Big Dig tunnel!

TOLLROADSnews 2007-09-18