Out of Control Policy Blog

Flogging a Dead Horse, Pennsylvania-Style

Predictably, the Feds' rejection of the I-80 toll proposal last week shines the spotlight squarely back on the $12.8B Abertis/Citi bid for the Pennsylvania Turnpike concession. In light of the I-80 decision, here's some good advice for PA legislators from The Times-Tribune in Scranton:

For the second time, federal regulators have rejected the establishment of tolls on Interstate 80. State lawmakers should recognize the reality of the situation and move toward leasing the Pennsylvania Turnpike as the means to generate the billions of dollars that the state needs for highway and bridge repairs, and to stabilize mass transit statewide.

Even before the Federal Highway Administration rejected the I-80 toll proposal the first time, the proposal to lease the turnpike was a better idea. It eliminated redundant administration of state highways, eliminated the need to borrow billions of dollars, eliminated the economic impact of tolls on Pennsylvania businesses and individuals along the I-80 corridor, and raised turnpike tolls at a predictable, defined rate.

A Spanish-American consortium of companies, headed by infrastructure manager Abertis Infrastructuras, of Barcelona, and the U.S. financial firm, Citigroup Inc., had bid $12.8 billion for a 75-year turnpike lease. The plan is for the state to invest that money, primarily through its pension funds, and use the earnings for roads, bridges and transit. Under the I-80 plan, the Turnpike would borrow billions of dollars against future toll revenue, thus incurring interest payments rather than collecting interest.

[. . .] Much of the zeal in the Legislature for the I-80 toll plan was in its preservation and expansion of the Turnpike Commission, along with its vast political influence and patronage.

Lawmakers long have failed taxpayers by maintaining two highway departments – PennDOT and the commission – rather than pressing for efficiency in highway administration. The commission should have been eliminated long ago in order to ensure that the most money possible is put into the roadways, regardless of the I-80 or turnpike lease proposals.

And the commission itself is responsible for the I-80 toll rejection. The FHA, when it rejected the I-80 proposal the first time, pointed out that it required an objective market valuation of the toll proposal. The commission, when it resubmitted the plan in July, did not give the regulators what they required.

[. . .] The turnpike lease is a viable and better alternative to the I-80 toll plan. Lawmakers should forgo a third attempt to convince the FHA, and embrace the lease proposal.

Read the full editorial here.

What's comical is that the PA Turnpike Commission's legislative lackeys...whoops, I mean "Act 44 proponents"...are proposing exactly what the editorial warns against. In a spark of genius worthy of Homer Simpson six beers into a case of Duff, they now want to wait out the election and resubmit the I-80 toll proposal for yet a THIRD time. Here's Act 44 sponsor and House Transportation Committee Chair Joe Markosek in yesterday's Allentown Morning Call:

Q: The FHWA said it turned down the I-80 toll application because it doesn't meet the requirements of the current federal pilot program. Is that the end of the debate, or is there still an opportunity to try again?

A [Markosek]: Act 44 (the law that authorized the I-80 tolls and borrows against future Turnpike toll revenues to raise money) doesn't expire for another year, so we have some time. We'll look at the reason (The FHWA) turned us down. There's a new (presidential) administration coming in January. That's uncharted water and it's one area that will be tested.

And here he is in Land Line Magazine:

"The Turnpike Commission is planning to resubmit the bid to the feds and after the first of the year. There will be a new administration in Washington," [Markosek] said. "Perhaps a fresh set of eyeballs will be able to review this and be able to come up with a more reasonable response to Pennsylvania's transportation needs."

Seriously?! The first two rejections weren't clear enough?! Albert Einstein was right when he famously said, "The definition of insanity is doing the same thing over and over again and expecting different results."

So let me get this straight...Markosek and his colleagues build a house of cards in Act 44, an illusory transportation "solution" built entirely off smoke and mirrors and crafty shell games. When that dog's breakfast falls apart as predicted (and deserved), Markosek looks outward and blames the Feds, instead of looking inward and recognizing that it is indeed he and his colleagues that need to put "a fresh set of eyeballs" on it and come up with "a more reasonable response to Pennsylvania's transportation needs." Earth to Markosek: ACT 44 IS TOAST, GET OVER IT--YOU CAN'T POLISH A T-...never mind, you get the point.

Perhaps the biggest joke is the notion that Pennsylvania's reknowned House of Patronage will get a sympathetic hearing in the next administration. Both major candidates have staked out strong positions on the need for reform, accountability and transparency in government. It should be mind-numbingly clear by now that anything that advances the PTC is an obstacle to more transparent, accountable government.

» Reason's Surface Transportation Research and Commentary

Leonard Gilroy is Director of Government Reform


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