Posts Tagged commonwealth

Road to Ruin: PennDOT Drains Turnpike Cash


The Pennsylvania Turnpike is America’s first superhighway.  It also has become one of the most expensive roads in the country to travel.  If you are in a passenger car driving the entire length of the turnpike from the Delaware River Bridge in the east to Gateway in the west it will cost you $42.30 if you pay cash, $30.32 if you have an E-Z Pass.

Traversing the Pennsylvania Turnpike gets more expensive for truck traffic, significantly more expensive.  That same east-west trip for the heaviest and largest of trucks costs $1,634.35.  As if that isn’t bad enough, recent annual fare hikes are projected to continue into the foreseeable future.

Pennsylvania is known as the Keystone state and for good reason.  Geographically we are centrally located for both north-south and east-west traffic destined for some of the nation’s most populous cities.  For decades the turnpike has been a key traffic route, but now both freight haulers and passenger cars are seeking out other routes – such as Interstate 81 that, while a bit out of the way for some, charge no tolls.

These facts have not escaped the attention of state Auditor General Eugene DePasquale who recently sounded alarm bells over the turnpike’s fragile fiscal situation.  In his audit of turnpike practices DePasquale said: “The plan for the turnpike’s financial future relies on projections calling for a 215% increase in toll revenue between 2015 and 2035 and a 44% increase in traffic volume through 2044.  However, traffic volume has remained relatively flat over the last decade.”

These two projections are inherently contradictory as basic economics dictates that consumers use less of a product as prices rise – especially if prices rise at a much faster rate than the income of the purchaser.  Thus, we can expect the past decade’s “relatively flat” traffic volumes to either remain so, or perhaps even decline as such significant toll hikes continue to be implemented.

It would be easy to blame mismanagement and the turnpike commissions’ often criticized hiring and contracting practices for these annual rate hikes.  But, in this case the problem has been caused by the state legislature, not by turnpike administration.  Act 44 of 2007 requires the Pennsylvania Turnpike Commission to make payments of $450 million per year to the Pennsylvania Department of Transportation (PennDOT).  PennDOT then spends the money on highway maintenance and on subsidizing mass transit operations.  Since the passage of Act 44, $5.2 billion in fare revenue has been diverted from turnpike operations to PennDOT.

Act 44 was passed with the unrealistic expectation that Interstate 80 would be converted to a toll road operated by the Pennsylvania Turnpike Commission. That revenue would offset the mandated subsidy to PennDOT.  State officials appealed to both the Bush and Obama administrations for approval of the scheme, but were rejected. As a result the turnpike has been saddled with making annual payments to PennDOT and no source to fund those transfers except annual fare hikes.

The legislative mandate is also having another impact: the turnpike is reducing planned spending on maintenance, improvements, and expansion. An ambitious rebuilding plan that includes expansion of the turnpike to six lanes in many areas has already been reduced by $1 billion over the next ten years.  DePasquale pointed out the folly of the situation stating: “You can’t cut back on construction and increase traffic 44%, especially while jacking up the toll rates.”

The subsidies to PennDOT are scheduled to end in 2022, but by then the turnpike’s financial situation will be dire. Worse, legislators will then have to determine how to fund the insatiable appetite for subsidies required by the state’s money-losing mass transit systems.

This problem should have been addressed two years ago when the legislature passed and Governor Tom Corbett signed into law a defacto 30-cent per gallon increase in gasoline taxes.  That would have been the time to end “haphazard funding gimmicks” such as Act 44 and placed both the Pennsylvania Turnpike and PennDOT on solid financial footing.

It didn’t happen then. But it needs to happen now before, as Auditor General DePasquale concluded, the system collapses “and leaves the turnpike and people who rely on public transit systems across the state in a world of hurt.”

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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A New Shade of Blue


Residents of Penn’s Woods are about to experience history in the making: the start of a new state budget year with the previous year’s budget still unresolved.

Governor Tom Wolf guaranteed the anomaly by line item vetoing almost a third of the budget passed by the GOP-controlled legislature just before Christmas.

The official start of the budget process comes in early February when the governor delivers his budget address to a joint session of the Pennsylvania General Assembly.  For a variety of reasons the remaining unresolved budget issues from the current fiscal year are likely to remain that way well past the governor’s budget speech currently scheduled for February 9th.

Governor Wolf began the current impasse last winter by proposing a massive increase in state spending and demanding a package of tax hikes that exceeded the tax increases proposed by the governors of all 49 other states combined.  The governor asked this of a legislature not only in control of the opposite political party, but one that holds historically high majorities and one which has become significantly more conservative in recent years.

It is a common strategy for both sides to stake out their most extreme position at the beginning of negotiations.  That leaves room for compromise, which is what always happens during budget talks.  Governor Wolf asked for $3.4 billion in new spending, the GOP preferred spending cuts.  Ultimately, Republicans agreed to a $1 billion increase, including significant additional funding for the governor’s top spending priority: public education.  The governor, however, wants everything he asked for and he wants in now.  Thus began the budget impasse which persists to this day.

The governor has made it clear he is not interested in compromise.  After vetoing the on-time, no tax hike, balanced state budget passed by Republicans last June he immediately sanctioned television ads blasting GOP lawmakers.  In another departure from tradition Wolf vetoed the entire budget.  In the past governors have signed the budget then blue lined or line item vetoed the parts with which they disagreed.  Wolf, however, wanted to ratchet up the political pressure on Republicans so he trashed the entire thing.

Since then there have been numerous votes on alternative budgets, proposed tax hikes, and so-called cost drivers including pension reform and a plan to partially privatize state liquor stores.  GOP lawmakers have passed these bills only to have the governor wield his veto pen.

Governor Wolf and his allies in the liberal media have taken to castigating Republicans, especially House Republicans for being “extremists” because they will not support a broad-based tax hike.  Largely unreported by the media is the fact Democrats in the legislature have been equally obstinate in their support of the governor’s tax and spend agenda.  Vote after vote has fallen along party lines with only a handful of defections on either side of the aisle.

This (aside from the governor’s stubborn streak) gets to the core of the impasse: Democrats have been reduced to a largely urban party that allows no deviation from its Left-wing agenda.  Conservatives dominate in the Republican caucus, but there is a group of moderate, mostly southeastern Pennsylvania legislators, who often fracture party unity by siding with Democrats.

And look for Democrats to become more ideologically rigid after this year’s elections.  State Representative Nick Kotik of Allegheny County is one of only a very few so-called blue dog Democrats and he is retiring.  The term blue dog originated because the Left strangles their moderate brethren blue to force compliance.  This canine is about to become extinct in the Pennsylvania legislature.

In its place is another shade of blue: that being the governor’s face.  He is determined to hold his breath until he gets his way.  He has called Republicans stupid, extreme and their most recent budget “garbage.”  By remaining in campaign mode rather than maturing into governing the governor’s strategy ensures not only that the current budget impasse will continue, but that Pennsylvanians are in for three more years of fiscal chaos.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

 

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