PA Gov Rendell says No to I-80 tolling requires a Yes to Abertis/Citi lease, some legislators agree

Following the Federal No to tolling I-80 on Thursday (2008-09-11) Governor Ed Rendell immediately called for enabling legislation to proceed with the agreed lease of the Pennsylvania Turnpike to the Abertis/Citi team which has a $12.8 billion offer in effect until Sept 30. Rendell says "It's the only plan." He says without it the state is back into financial crisis.

Under the Turnpike Commission's agreement with the state it loses half the expected $900m in lease payments from the Turnpike Commission in 2010 if tolling doesn't proceed on I-80. And instead of growing, the payments to the state stay at $450m/year, regardless of inflation.

Evans, appropriations chair says will lead the push for legislation

There are growing signs of legislative support for HB2593, the enabling legislation to allow the $12.8b lease to proceed. House Appropriations Chairman Dwight Evans, a prominent Philadelphia Democrat today said he believes the lease is the best option for the state. He said he will take the lead in moving for debate and passage of the enabling legislation.

"I am prepared to take the lead because I believe it’s our best available option. I am prepared to vote yes," said Evans in a statement his office issued today.

Evans said: "I urge fellow House members to look seriously at a proposal that allows the state to lease the Turnpike to a private consortium to raise money for roads, bridges and mass transit in Pennsylvania. It is high time this matter be brought to the full House for a debate and a vote."

Another Philadelphia Democrat Rep Jewel Williams, and a Pittsburgh Rep Jake Wheatley have also come out for the Abertis/Citi concession today.

Active lobbying

The concession partners have a major lobbying operation going on alongside that of the Governor in support of HB2593. So too, of course, does the Turnpike Commission and its supporters in opposition.

Jim Courtovich who leads the lobbying campaign for Abertis/Citi Partners today declined to provide his estimates of the numbers for, against, undecided on HB2593. He said he doesn't know yet how the I-80 decision has affected them but predicts many will be be looking more actively at the case for a lease now that the prospect of I-80 tolls has been dashed.

"The issues are clearer now that the tolling of I-80 has been dispatched," he said: "We are optimistic."

The old Vince Fumo political machine in Philadelphia that has been a huge base of support for the Turnpike Commission is showing signs of losing its grip, Courtovich says.

The willingness of leading Democrats in the Philadelphia area, once Fumo turf, to take an independent position is Courtovich says: "big, very big."

Dwight Evans sponsored the enabling legislation last session, and said at the time that it deserved to be debated. But now he says he supports it, and will lead the effort to get it passed. Evans is chair of the House appropriations committee.

There are few signs however that others in the leadership have broken with the Turnpike Commission.

Sponsor of Act 44

Rep Keith McCall the majority Whip said last year when sponsoring Act 44 that a rejection of I-80 tolling "would actually blow up the (Act 44) plan." (2007-06-21) It is unclear if McCall thinks now that the state can live with the shattered remains.

Joseph Markosek, chair of the House of Representatives Transportation Committee and a Pittsburgh area Democrat continues to say he won't bring HB2593 up for a vote in his committee. He says: "The lease, as far as I am concerned, is a dead issue.''

Brimmeier hot and cold

The Turnpike Commisssion CEO Joe Brimmeier's initial reaction to reports of a Federal No was defiant and assertive. He told Capitolwire in Harrisburg yesterday just before the rejection was officially confirmed: "If they turn us down, we will reapply, we will amend and fix whatever they think is wrong, and go on about our business. This is the biggest transportation deal in America and it will go on until the next administration, no matter what happens.

"Do I hope we get a first phase approval, even if it is conditional? Sure, then we can go on to phase two. If we don't, we fix and resubmit. A no would not be the end of the road."

Today Brimmeier was making no mention of reapplying to toll I-80.

His reaction in a statement today is much more subdued (we quote in full):

"The Pennsylvania Turnpike Commission believes that it met all of the statutory and procedural requirements in the pilot program, and we are disappointed in the federal decision to not move the state's joint I-80 tolling application forward. Yesterday's FHWA memo may well eliminate a critical tool in an already-limited transportation funding toolbox - not only for Pennsylvania but for all states facing a transportation-funding crunch.

"The Turnpike Commission continues to fulfill its Act-44 financial obligations. It has made Act-44 payments totaling $962.5 million to PennDOT over the past year alone. In addition, more than $1.5 billion in guaranteed funding will be transferred to PennDOT between now and 2010 for highways, bridges and public-transportation agencies across the commonwealth. This ongoing funding stream means that Pennsylvania General Assembly members have ample time to carefully consider their options and choose a solution that is best for all Pennsylvanians.

"The Turnpike's objective has always been to assist the (state) by offering viable alternatives to supplement the state's transportation budget. Under Act 44, we've served as the linchpin of the state's funding solution, and we anticipate a role in whatever future decision the General Assembly reaches. We still believe that the unique public/public partnership created under Act 44 - which maintains public ownership and oversight of a vital asset - definitely has merit and can serve as a model for other states. If called upon again, we are ready to do our part to ensure the state's ground-transportation network remains adequately funded and viable for many years to come."

Agreement that Turnpike Commission remains formidable

The Commonwealth Foundation which campaigned against the handover of I-80 to the Turnpike Commission agrees with the Turnpike CEO that its financial and political power remains formidable.

Matt Brouillette there said: "Even with I-80 tolling off the table, Act 44 offers numerous pitfalls. The Turnpike Commission will continue to issue new debt, tied to both the Motor License Fund and higher Turnpike tolls. Act 44 does nothing to reform the Commission's patronage or the no-bid contract process conducted by the (toll) agency."

But Brouillette notes that Act 44, without I-80 tolling, provides only $450 million to the state each year in perpetuity. In contrast, he says, the proposed Turnpike lease would provide $37 billion more in revenue to the state over the next 50 years.

"Following this rejection by the FHWA, legislators must seriously consider leasing the Turnpike, along with contracting out mass transit services and engaging in public-private partnerships on new construction. Not only does a Turnpike lease generate $37 billion more in revenue than Act 44, but it allows the state to retire rather than increase its debt, provides protection against future toll increases, and eliminates the corrupt Turnpike Commission for good.”

TOLLROADSnews 2008-09-12