Battle to toll I80 still rages

Some things never change.

For example, seasonal realities of freezing and thawing always play havoc with Pennsylvania’s highways and bridges. What has changed is the state’s ability to pay for the repairs and maintenance of those road surfaces.

Gas-tax revenues, the primary source of transportation funding, continue to decline as a sluggish economy and higher gas prices compel motorists to drive more fuel-efficient vehicles and fewer miles. In fact, the total amount of driving in the U.S. has slowed dramatically, falling 108 billion miles from December 2007 to December 2008, the largest sustained drop in driving the nation has ever seen, according to the Brookings Institution.

The state’s revenue problem can be easily explained: the money flowing into the state’s transportation fund no longer covers the costs of repairing and maintaining the state’s 121,000 miles of state and local highways and 55,000 bridges. According to a report prepared by the Transportation Funding and Reform Commission, the state needs an additional $1.7 billion a year just to get its highways, bridges and transit system in a state of good repair.

Solutions to create a viable transportation funding mechanism continue to bounce around in the halls of the General Assembly. A few years ago, Gov. Rendell proposed leasing the turnpike, but legislators didn’t agree. Instead, they proposed to supplement the state’s transportation funding by increasing tolls on the Pennsylvania Turnpike and by creating tolls on Interstate 80. Act 44 of 2007 in part mandated a 25-percent increase in tolls last year and a 3-percent increase each year thereafter.

“The other half of that equation was converting Interstate 80 to a toll road,” says Rich Kirkpatrick, spokesman for the Pennsylvania Dept. of Transportation. “It requires approval of the federal government and that’s what the turnpike commission has been seeking ever since then. Another revised application has been submitted to the federal government and we’re awaiting a determination of that revised application.”
PennDOT expected the increased turnpike tolls and new I-80 tolls combined over the first 10 years of Act 44 to generate about $945 million a year in additional revenue toward closing the state’s $1.7 billion funding gap.

“It didn’t close it all but made substantial progress toward that goal,” says Kirkpatrick. “If, in fact, the federal government refuses to approve tolling Interstate 80, instead of $945 million, Act 44 will generate only about $450 million coming directly from tolls on the existing turnpike. If tolling of Interstate 80 has not been accomplished, the funding generated by Act 44 will be cut virtually in half.”

Kirkpatrick expects to hear from the Federal Highway Administration (FHWA) sometime this year, hopefully before July 1 when the state’s budget is due. But the FHWA will give no specific timeline for an answer on the application for tolling I-80.

“We’re reviewing the application as expeditiously and thoroughly as possible,” says Nancy Singer, spokeswoman for the Federal Highway Administration, Washington, D.C.
According to Singer, states need to get permission from the federal government to toll any existing route supported by federal funding, but limited opportunities exist to do that.
“Under certain conditions, tolling is possible,” says Singer. “There is the congestion management angle and then to finance new improvements. Those are the two ways really that interstates or (federally-funded) highways can be tolled.”

Other states face similar transportation funding problems, including Montana and Virginia, both of which have received approval to toll roads under the Interstate Reconstruction and Rehabilitation Program. To date, tolling has not yet begun in those states.

“We find ourselves in this predicament because our gas taxes have not been increased federally since ’92 and in Pennsylvania since ’96,” says Carl DeFebo, spokesman for the Pennsylvania Turnpike Commission. “In the more than a decade since those gas-tax increases, PennDOT’s costs to maintain and rebuild our highways have dramatically increased.”

Since the passage of Act 44, the Turnpike Commission and PennDOT have submitted an application to the Federal Highway Administration for approval to toll Interstate 80. The two-year-plus process included additional studies to provide requested information and additional information to answer FHWA’s questions.

“This is a critical transportation funding debate playing out in Pennsylvania,” says DeFebo. “It boils down to this: It costs more today than ever before to maintain and operate our roads, but yet the revenue that PennDOT receives has not kept pace. So how are we going to pay for our roads? We paid to build them with our gas tax. The gas tax is insufficient to reconstruct our highways, which have turned 50 years old and are now in need of rebuilding from the ground up. So at the core of this debate is: What’s our funding mechanism going to be for roads moving ahead?”

Unless the Federal Highway Administration approves Pennsylvania’s application to toll Interstate 80, Act 44 funding for highways, bridges and transit will drop. In July 2010, the turnpike’s payments will drop to a fixed $450 million a year if I-80 is not tolled. If

the I-80 tolling application is approved, annual payments increase 2.5 percent a year. So instead of making a $923 million payment if tolling is approved, the turnpike’s Act 44 contribution to PennDOT could drop to $450 million next year — a $473 million reduction in fiscal year 2011 alone.

"We believe a user fee or a toll is a forward-thinking way to pay for transportation because it isn’t counter-intuitive to energy policies we need to implement," says DeFebo. "So even if the politicians in Washington and Harrisburg would agree to increase a gas tax, it’s probably not a good idea. It’s kind of policy schizophrenia. On the one hand, we have got to build more fuel-efficient vehicles that use less gas and more vehicles that use alternative sources of energy. Everybody agrees with that. How could you at the same time rely on the gas tax as the primary way that we build our highways? It doesn’t fit."

If tolling doesn’t fit, one state represented proposes another alternative.

"Essentially HB2134 takes the management and oversight of the turnpike commission and moves it under the Department Secretary of Toll Administration under PennDOT," says Rep. Mike Vereb (R-Montgomery). "This person would oversee the entire turnpike operations. The one guaranteed thing is that the labor jobs that the collective-bargaining agreement covers would be transferred. The one place there would be potential loss would be in the administrative offices with elimination of positions."

Vereb says the takeover would not affect turnpike operations as they currently exist except for shifting top-level management positions to PennDOT.

"The agency itself is an independent agency and while the turnpike is in good condition, the perception and the issues surrounding the turnpike for years are alive and well today," he says. "We have to look at going forward in transportation in one voice and one vision. It’s not just a cost savings. We have to regionally plan. Having everything under PennDOT from a planning perspective and reality perspective will have one mission and one goal, not a bunch of separate entities managing them and not participating in a regional conversation."

While Vereb expects minimal savings from abolishing top-level salaries, he believes other savings are possible.

"PennDOT was recognized for its efforts with the stimulus, where with all the bidding they did, they still managed to save the money for more jobs than they planned on," says Vereb. "We definitely think there is a lot of cost savings in this and it may be in the billions of dollars. We also think there is a process and a vision for savings moving forward."

Vereb also hopes the bill will spark a conversation toward more centralized planning in the state’s transportation arena.

A member of the Senate Transportation Committee, Sen. Lisa M. Boscola (D-Lehigh Valley), expresses concern.

"A core function of state government is infrastructure, and we have to find a way to pay for it," says Boscola. "Obviously when you toll roads, it’s a little bit more fair because the people using those roads are paying for those roads."

Yet Boscola doesn’t believe abolishing the turnpike commission and putting additional responsibilities on PennDOT is prudent at this time.

"For, now to put the commission under PennDOT, I don’t know that it’s the right thing. PennDOT hasn’t been a stellar department, either, so I would be a little hesitant to do that. I would rather have a turnpike commission stay a turnpike and keep that money within the system as opposed to a bigger agency that can float money around. If the bill ever gets legs, we’ll see." Boscola hopes the bill may create conversation and internal changes that would cause the turnpike commission to review its policies and operations.

"Bigger isn’t always better," says Boscola. Bigger or not, lawmakers all agree the transportation funding mechanism needs to change — and change very soon.

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