Massachusetts Turnpike rescinds toll hike after Governor says he'll sign $100m/year bailout

Just 36 hours before a big toll increase was due to come into effect (on July 1) the Massachusetts Turnpike Authority board voted 5 to 0 to rescind toll increases voted earlier in the year. The vote today was based on passage of budget legislation providing for an increase in the state sales tax from 5.0% to 6.25% and the appropriation of $100 million per year toward servicing of Turnpike debt for the term of that debt - about 20 years.

Governor Deval Patrick was at first reluctant to sign on to the sales tax increase, favoring a gas/diesel tax hike, but a statement at the weekend that he would sign the budget bill was sufficient for the Turnpike board to rescind the toll increases today.

Tolls would have doubled at the harbor tunnels and gone from $1.25 to $2.00 at the two mainline toll plazas on the Boston portion of the Turnpike.

Major problem is the debt of $2.2b was incurred by the Turnpike Authority starting in 1997 under state legislation which required it to take over state responsibility for the $14.6b Big Dig project, most of which is toll-free and generates no revenue. Without huge and inequitable increases in tolls on the existing Turnpike and harbor tunnels the Turnpike Authority faced a financial crisis as a result of escalating obligations from the financing of the Big Dig.

Dissolution of Mass Turnpike

The Turnpike Authority itself will be dissolved later this year under a reorganization bill signed by the Governor last week. All its assets and liabilities will be transferred to a new Massachusetts Department of Transportation (MassDOT) which despite its name is being constituted as a pseudo-independent state authority with an appointed board of directors. (Departments are usually understood to be run by a secretary serving at the pleasure of the Governor, but then the Massachusetts state legislature is formally titled a General Court.)

MassDOT will have a highways division that will operate the Turnpike and other state toll facilities as well as tax-supported roads. MassDOT also has to operate Boston's transit services called the 'T' that run huge annual losses.

More tolls predicted

Turnpike board member Mary Connaughton predicts that before long the state's financial situation will become so dire that legislators will move to raise $100m/year to service the Big Dig debt by implementing cashless tolls on I-93 and the Zakim Bridge - the presently untolled portion. She told us she suspects the sales tax  increases will yield less than needed, and the logic of cashless tolls on the beneficiaries of Big Dig improvements - motorists driving I-93 each day -  will be the next move.

Budget legislation containing bailout:

see http://www.mass.gov/legis/ht04129.pdf

TOLLROADSnews 2009-06-29