Leading thinktank in Harrisburg calls for competitive bids for tolling I-80

July 14, 2008

With the Pennsylvania Turnpike Commission rolling out its plans for Interstate 80, the Commonwealth Foundation thinktank in Harrisburg called on officials to seek competitive bids from the private sector to lease and operate the highway if policymakers choose to toll the 500km (311-mile) interstate.

"We don't believe it is necessary to toll I-80, but if policymakers are determined to do so--and Pennsylvania receives federal permission--we should go to the marketplace and see what the private sector will bring to the table for a lease under the same conditions as the Turnpike Commission," said Matthew Brouillette, president of the Commonwealth Foundation in a press statement.

"The last thing we should do is merely hand over the tolling of I-80 to the Turnpike Commission. Not only is it bad public policy not to seek competitive bids on such a major transportation project, but it will likely cost taxpayers billions of dollars."

Based upon the Abertis-Citi offer of $12.8 billion to lease and operate 800km (500 miles) of the Turnpike, a concession agreement on I-80 would likely generate more money for the state than the Pennsylvania Turnpike Commission's plans under Act 44, Brouillette says.

"The Turnpike Commission's shortfall in transportation funding will require higher gas taxes and more bonded debt in the future. But a lease of I-80--coupled with a lease of the Turnpike--would likely fill Pennsylvania's entire transportation infrastructure funding gap," said Brouillette.

As a presently free Interstate Pennsylvania needs federal approval to toll I-80. The Federal Highway Administration rejected the Turnpike Commission's initial application in December 2007 as failing to make the case for tolling under the federal law, and raised about a dozen questions or issues to be addressed. After eights months the Turnpike Commission has said it plans to re-submit its application addressing these points by August 2008.

Gov Rendell is urging the state legislature to consider enabling legislation for implementation of the Abertis-Citi toll concession when it reconvenes in September. House transportation committee chairman Joe Markosek has declared that he won't allow the bill to be considered and that it is "dead." Supporters of the bill say it is still possible the bill will be put through another committee - for example appropriations.

But the Turnpike Commission's political clout in the legislature remains formidable, and the odds look to be against Rendell getting his bill.

New paradigm

The Foundation statement supported private sector toll concessions as a new paradigm:

"All across America and around the world, a new paradigm in transportation funding policy has emerged. The private sector has demonstrated that it can bring greater value to the table while shifting the financial risks away from taxpayers.

"If I-80 is to become a toll road, it would be fiscally irresponsible to not seek competitive bids and explore a public-private partnership. The old funding model of raising taxes, hiking fees, and going into bonded debt is no longer a sufficient and efficient means of financing and operating our transportation infrastructure."

TOLLROADSnews 2008-07-14

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