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Turnpike revises its plan to raise revenue
Wednesday, June 20, 2007

HARRISBURG -- With Gov. Ed Rendell's plan to lease the Pennsylvania Turnpike and tax oil companies going nowhere with legislators, the Turnpike Commission is pushing a new alternative plan to raise at least $700 million a year to upgrade roads and bridges and bail out struggling mass transit systems.

Turnpike Chief Executive Officer Joseph Brimmeier, aided by outside financial and legal consultants, outlined his revised transportation funding plan yesterday before the Senate Democratic Policy Committee, which greeted the plan a bit coolly.

The new plan is based on a previous transportation funding plan that the commission had unveiled in March, but one key feature has been dropped.

The commission's plan no longer calls for a $1 "congestion charge" to be levied on drivers leaving the turnpike at several exits in areas near Pittsburgh, Harrisburg, Philadelphia and Scranton.

"It was an idea that nobody liked," admitted Mr. Brimmeier, who worked in Allegheny County government for years before being named turnpike boss in 2003.

The revised plan consists of three parts:

Borrowing $4 billion by floating a bond issue, which would be paid off with money from the state Motor License Fund. However, the commission would reimburse the fund for those bond payments by using its toll revenues. It would take 25 years to pay back the money, but the $4 billion would be spent at a rate of $400 million a year for 10 years, starting in 2008.

All $4 billion would have to be used for repairing roads and bridges because the Motor License Fund is funded by the state gasoline tax, driver's license fees and other vehicle-related sources. Its money can't be spent on mass transit.

Starting in 2010, tolls would be placed, for the first time, on Interstate 80, which would raise $100 million a year. Toll booths would be placed on the Ohio and New Jersey borders and perhaps a few places in-between. All the toll money would have to be used for I-80 improvements, but that would free up the $100 million that the state Transportation Department now spends on I-80. That $100 million would go for fixing thousands of miles of other highways and repairing about 6,000 bridges.

Signing a first-time "lease payment plan" with PennDOT, under which the commission would give annual payments to PennDOT. For 2008, PennDOT would receive $200 million in lease payments, rising to $300 million in 2009, $350 million in 2010 and further increases based on inflation in following years. Those payments would come from turnpike toll revenues, but PennDOT could use some or all of the lease payment for mass transit.

Turnpike officials expect to have enough money for the lease payments, especially after tolls rise by 25 percent in 2010 and by about 3 percent each year thereafter. Those rate hikes are already set to occur regardless of what happens with the new turnpike plan.

The turnpike plan is a counteroffer to the plan that Mr. Rendell had proposed in February. He wants to lease the turnpike to a private operator for 99 years, which the governor says would generate $965 million a year for road/bridge projects. He also is calling for a new tax on oil company profits, which he says would generate $760 million for mass transit.

In all, his plan would produce about $1.7 billion a year, which is far more than the $700 million that the commission's alternative plan would generate in 2008.

But few legislators have rushed to embrace the Rendell plan. Some don't like the idea of the state losing control over a key asset like the turnpike. Some private bidders for the turnpike are foreign companies, and legislators don't like the idea of a foreign firm setting toll rates or handling road maintenance. Some legislators say the oil company tax would bring higher gasoline prices.

But some senators had questions about the turnpike plan. Wayne Fontana, D-Brookline, and Jim Ferlo, D-Highland Park, questioned whether it provides enough money for ailing mass transit systems in Pittsburgh, Philadelphia and other cities. The turnpike plan would earmark up to $200 million a year for mass transit, which would is far less than the $760 million a year provided under the Rendell plan.

Sen. Richard Kasunic, D-Fayette, said the plan should include money to complete the unfinished sections of the Mon-Fayette Expressway in southwest Pennsylvania.

State Transportation Secretary Allen Biehler told the panel yesterday that it's vital for the Legislature to act quickly on some plan for greater transportation funding. He said the Allegheny County Port Authority already has cut its bus routes by 15 percent and laid off 200 workers, with more cuts set for September if additional state aid isn't forthcoming.

However, Republicans control the Senate 29-21, and it isn't known if they will bring the turnpike plan up for a vote before the Legislature recesses for the summer July 1.

"We do think the idea has merit and should be considered," said Senate GOP spokesman Erik Arneson, but he wasn't sure when that will happen. Most of legislators' time before the summer recess starts will be devoted to adopting a new state budget of about $27.3 billion.

First published on June 19, 2007 at 11:03 pm
Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
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