Following Feds letter Gov Rendell says he prefers lease of Turnpike to tolling of PA/I-80

Following the Feds letter of Thursday casting doubt on the legality of tolling PA/I-80 Pennsylvania Gov Edward Rendell said he prefers a longterm lease concession of the Turnpike. The AP quotes Rendell as saying today:
- the lease will raise "significantly more" money for the state, and
- remove what he called the "I-80 problem"

They quote him as stating bluntly: "I would prefer to do leasing of the Turnpike."

Rendell says he only reluctantly signed Act 44, the law which led to the award of an uncompeted 50 year toll concession over I-80 to the Pennsylvania Turnpike Commission. The Act was crafted by longtime legislative allies of the Turnpike Commission like Senator Vincent Fumo, and adopted by legislative leaders in an end-of-financial year crisis setting.

The governor says he hopes to have firm proposals for a longterm lease of the Turnpike to present to the legislature by the end of February.

The Turnpike Commission would be disbanded under this proposal.

Supervision of the Turnpike concession would be conducted by the state DOT. Operations of the Turnpike would be taken over by a competitively selected business group under terms laid down in a concession and lease contract written by lawyers for the state. The contract might require the concessionaire to keep on all but the most senior managers for a period such as the term of the existing labor contract, or simply to interview Commission employees for available jobs. Those details would be up to the state.

Support for the governor's proposal is growing as the likelihood of tolling I-80 dwindles. Republican leader of the state house Sam Smith says supporters of the Turnpike have not made a case for tolling I-80. He wants fellow legislators to look at all other methods of raising needed funds including the lease of the Turnpike. Impatient to hear what the private sector is offering he called on the Governor to "divulge" details of what a lease could raise.

The Commonwealth Foundation a prominent policy thinktank in Harrisburg said in a statement: "Instead of raising taxes, erecting new tolls, or incurring more taxpayer debt, lawmakers should be partnering with a private company to run the Turnpike and contracting out mass transit services. Only then will we begin to fully address our transportation needs."

"Morgan Stanley's preliminary analysis of transportation funding suggest that a Turnpike lease could generate $1.6 billion annually—nearly the amount identified as needed to close the long-term transportation funding gap without billions in debt or tolling I-80."

US congressman for northern Pennsylvania John Peterson says the FHWA letter was a "red flag" to state leaders that they need to "go back to the drawing board." The Feds tough questions for the Turnpike Commission showed the scheme for tolling I-80 was "all but flatlined," Peterson said. ('Flatlined' is emergency medical services lingo for the electrocardiogram heart monitor graph going flat on the death of the patient.)

"The governor and state legislature must summon the necessary political will to repeal Act 44 and move forward with an alternative plan immediately," said Peterson.

Turnpike Commission CEO Joseph Brimmeier, fighting for the survival of his fiefdom, pretends that the FHWA letter is no big deal, just in his words a "request for additional information" and part of "an ongoing dialog" and a paperwork gathering exercise of providing "additional data."

Trouble is the Feds letter makes it clear they are determined to judge the Turnpike's application to toll I-80 by a rigorous examination of how it comports with federal law. The Turnpike's only hope for getting a federal OK on tolling was that they would take a rather loose approach to the interpretation of US law and give the Turnpike Commission the benefit of the doubt.

The more the Turnpike is forced into providing detail the clearer it will be that the Feds cannot by law approve tolling I-80 as proposed by the Turnpike and Act 44. The huge annual lease payments by the Turnpike Commission to the state are designed as a means of siphoning off I-80 revenues for the rest of the state, while federal law authorizing tolling under the rehabilitation and reconstruction program flatly prohibits diversion. It requires that the state commit all the toll funds to go back into the interstate being tolled.

The Commonwealth Foundation's president Matt Brouillette put it succinctly: "The bottom line is that under this (US) program you can't use I-80 tolls for purposes other than maintaining I-80, which is exactly what Act 44 calls for. No response from the Turnpike Commission can fix that."

No amount of Brimmeier data or dialog can reconcile the irreconcilable. It can however provide a rationale for procrastination by legislators and give the Turnpike Commission time to devise another gambit in their struggle for survival.

TOLLROADSnews 2007-12-14