Gov Patrick proposes abolition of Mass Pike, 19c+ gas tax, rollback of toll hikes

They may be retiring the quaker hat in Boston MA. Governor Deval Patrick has proposed abolition of the Massachusetts Turnpike Authority as part of a comprehensive transport "reform" package that would raise the state gasoline tax by 19c, demand major concessions from labor unions, allow public-private partnerships and reorganize state transport agencies.

Tolls would continue and be administered by the Executive Office of Transportation (state DOT). But toll increases expected to be voted by the Turnpike Authority board any day now to meet a crisis would be rolled back as soon as the legislature enacted the 19c gas tax hike and other reforms.

The plan is a major production with the Governor making a televised speech, unveiling of a website feature with the title "You Move Massachusetts, Envision Engage Enable," customized graphics and lots of marketing palaver. And a morning leak to the Boston Globe.

Under the Patrick plan of the 19c/gallon gasoline/diesel tax increase:

- 4c would go to rollback proposed/enacted toll increases

- 6c to rail/bus/commuter transit in metro Boston to avert fare hikes, service cuts for 2 to 3 years

- 1.5c to regional transit

- 1.5c to regional road projects

- 3c to rural passenger rail

- 2c for salaries and benefits of state transportation personnel (in place of incurring more debt)

- 1c for "innovative gas and toll solutions" (road use charges) to prepare for the decline of the gas tax as a funding source

Each cent on the Massachusetts gasoline/diesel tax is estimated to yield around $25m/year. In effect the proposal raises an additional $475m/year of which $100m would be devoted to the costs of the former Turnpike Authority. Most of the proposed 19c/gal fuel tax hike (12.5c) would go to transit  - $312m/yr or nearly two-thirds. Since transit only provides about 15% of passenger journeys and none of the freight devoting 65% to transit will be questioned by many.

Tolls will continue

To replace current toll revenues another $275m/year would be needed or an additional 11c/gal. Moreover with tolls removed from the metro Turnpike more traffic would be attracted to an already stretched. An extra lane each direction would probably be needed for about 20 miles plus ramp improvements to maintain tolerable travel conditions. The inner Turnpike is built below buildings and it would be extremely difficult and expensive to add lanes. Similarly at the harbor tunnels the end of tolls would attract extra traffic and require expensive extra capacity - probably an extra tunnel tube.

There is no known source of revenue apart from tolls to support such expansion of capacity.

Gov Patrick made no mention in his proposal today of new toll points at the state borders, an idea he floated just weeks back.

He also made no direct mention of a road use charge but the proposals do speak of the "inevitable decline" in the fuel tax and devote $25m/year to "innovative gasoline and toll solutions."

Patrick's speech refers to using public private partnerships mainly for "non-core functions" - such as service plazas along the Turnpike.  That's already being pursued.

There is little financial detail in the Governor's proposal.

It remains to be seen whether the state legislature will enact the Governor's plan or something like it. The state would have to defease or assume some $2.5 billion of Turnpike Authority debt to abolish it, an issue not addressed in the Governor's proposals so far as we can see.

BACKGROUND: Toll revenue in the last full financial year of financial reporting was $115.8m on the western Turnpike. Debt ("non-current liabilities") in mid-2008 was $158m. Debt service cost $26.2m.

Toll revenue on the Metropolitan Highway System (MHS) consisting of the Turnpike east of MA128 and the three harbor tunnels was $149.3m (split about $85m Turnpike and $54m tunnels). Total debt mid-2008 was $2320m, mostly related to the non-tolled Big Dig. Principal and interest on bonds was $111m in the last full fiscal year. 

Toll increases voted tentatively by the board of the Turnpike Authority would add about $90m to $100m/year to MHS revenues of $150m taking them to the range $240m-$250m/yr.  Western Turnpike tolls would remain in the range $110m-$120m.

Gov Patrick's proposals

http://www.mass.gov/youmovemassachusetts

COMMENT: There is disappointingly little financial detail in the Governor's proposal suggesting it is mostly an attempt to see what is politically acceptable by way of raising extra revenue. The Turnpike Authority has been dismally managed in the past but major improvements have been made in the past year by the current CEO Alan LeBovidge. It is unclear the toll facilities will be better run as part of a broader highways authority or state DOT. New Hampshire is the model?

Raising motor fuel taxes so drastically seems short-sighted. Massachusettts is a small state. Rhode Island and southern New Hampshire are virtual suburbs of Boston. Motorists will be encouraged to "tank up" at lower pump prices in adjacent states, depriving Massachusetts of both revenue and business.

TOLLROADSnews 2009-02-20