Massachusetts Treasurer says use of Turnpike tolls for toll-free I-93 "fundamentally unfair"

The Massachusetts treasurer Timothy Cahill has written a letter to the state Governor and the state Attorney-General in which he says the state should settle with litigants suing the Turnpike for refund of $400m in tolls on the grounds that they were unconstitutionally used for untolled sections of the Big Dig.  The letter was leaked to the press today.

Not addressing the merits of the case BUT...

Cahill's letter claims he isn't addressing the merits of the case, but goes on to say "to overcharge tollpayers so others can ride for free is fundamentally unfair. This type of fiscal shell game cannot continue and must be addressed immediately."

For ten years the Massachusetts Turnpike has been using tolls collected on the east-west Turnpike (I-90) and the harbor tunnels to help pay for the costs of the major segment of the Big Dig project, I-93 which goes north-south and is untolled.

As an exercise in political favor trading the $8b+ undergrounded I-93 has been aptly named the Tip O'Neill tunnel after the late US House of Representatives speaker from Boston who was instrumental in the arrangement. President Ronald Reagan sensibly vetoed US aid to the notorious Big Dig project but O'Neill managed to garner just enough votes in the House to override Reagan's veto.

More than a decade later, in the final months of the life of the Turnpike Authority a judge in state Superior Court in Middlesex MA is hearing a large class action suit led by famous lawyer Jan Schlichtmann which claims that the Big Dig payments by the Turnpike are unconstitutional misappropriations. The suit asks for refunds.

case website: http://www.tollequitytrust.com/index.html

Treasurer Cahill in his leaked letter to his collagues says the state could be up for hundreds of millions of dollars if the case goes against the Turnpike because the state is in the process of taking it over. The Turnpike will be placed along with Boston's museum-piece transit agency the "T" within a new authority called a Department of Transportation.

The Treasurer says in his letter that too little attention has been given to the lawsuit and it needs to be settled urgently.

Local reports suggest Cahill has political motives for grabbing headlines against the administration of which he is a part since he recently broke with the Democratic Party, and may be considering running for office against Democrats.

In response Turnpike executive director Jeffrey Mullan says he is "disappointed that the (state) treasurer has chosen to insert himself in an active lawsuit in a way that could compromise the Turnpike Authority's defense."

Mullan says the Turnpike is "vigorously defending" against the suit that could "cause excessive harm" to taxpayers and tollpayers.

Another ex-official weighs in against the Turnpike

A former attorney-general Scott Harshbarger is also working with the Schlichtmann group and today he hailed the Treasurer for his "leadership".

Harshbarger called on the Governor Deval Patrick to support his Treasurer in seeking a negotiated settlement of the law suit, saying: "This is the best and cheapest way to ensure a comprehensive, expedited, open, honest, and fair resolution (of the suit)."

The cross-subsidies between the tolled I-90 and untolled I-93 Big Dig were the result of legislation passed in the late 1990s which divided the Turnpike into the rural Turnpike West and the Metropolitan Highway System. At the same time control over the Big Dig project was transferred from the Massachusetts Highway Department to the Turnpike Authority.

Many people have criticized the move as bad public policy -  building for untolled north-south movement through the hugely expensive undergrounded I-93 with the tolls of east-west I-90. It always seemed a case of the politically powerful north and south represented by the likes of log-roller O'Neill preying on the politically weak western suburbs.

But no one suggested this was unconstitutional - until the recent case was lodged by Schlichtmann.

Many examples

Dozens of other examples can be cited across America in which toll revenues from one road are used to support untolled roads and transit. But the Big Dig is probably one of the largest and it has had the direst consequences for the toll authority.

The Massachusetts legislature recently raised the state sales tax by more than a percentage point to generate $100m/year indefinitely to avoid putting increased I-93 costs on I-90 Turnpike users.

New York MTA Bridges and Tunnels tolls going to the city subways is probably the largest cross-subsidy from tolls in the US at some $800m/year.

Other examples:

- New York State Thruway pays for maintenance, operations and rebuilds of untolled I-84 north of New York City and a long stretch of I-190 in the Buffalo area

- Port Authority New York New Jersey and Delaware River Port Authority both use toll revenues to support loss making subway lines (PATH, PATCO)

- Golden Gate Bridge uses toll profits to support lossmaking ferries and buses

- West Virginia Turnpike, Miami Dade Expressway Authority, Garden State Parkway, Kennedy Highway (MD) and Delaware Turnpike all have many toll-free segments paid for by the users of the tolled segments 

(Miami-Dade is in process of remedying its toll leakage and equalizing tolls as part of adoption of cashless all-electronic tolling)

- Bay Area Toll Authority in San Francisco uses toll profits on seven toll bridges for a whole raft of non tollroad purposes

- Delaware River Joint Toll Bridge Commission maintains some 20 bridges between NJ and PA of which only seven are tolled, the others living off those tolled

- Maine Turnpike has a number of free trippers who live off the others, New Hampshire even more

- Virginia's Dulles Toll Road was recently transferred from Virginia DOT to the local multijurisdictional Washington metro airports authority and toll revenue bonds are being issued to fund as substantial portion of the $5b Dulles metrorail line

A THOUGHT: Now there's a great case for Jan Schlichtmann - right in our backyard! He could take on the Kennedy Highway (I-95) at the same time. And West Virginia's not far away.

TOLLROADSnews 2009-07-27 ADDITION 2009-07-28 9:45