No single solution to transportation crisis

Robert Latham takes us (along with the Turnpike Commission) to task in an Patriot News op-ed.

Among the charges lobbed our way is that we are pushing a Turnpike lease “contending it would fund all of the state’s bridge and highway needs” and that “The Commonwealth Foundation, like a dog with an old shoe, is retouting the Turnpike lease idea, despite its rejection by the General Assembly last summer.”

He adds: “Contrary to what the foundation suggests, leasing the Turnpike would not negate the need to toll I-80, because keeping that road toll-free would greatly reduce the value of a Turnpike lease.”

He also implies (in a brief aside) that the Chicago Skyway lease as a bad deal because Mayor

Richard Daley used entirely for non-transportation purposes. Recently, the Engineering News Record reported that Chicago’s transit authority is facing an $8 billion deficit. Are asset leases a long-term solution or a short-term budget gimmick?

I will address these in reverse order:

1) Is Latham suggesting that the the Chicago Transit Authority’s deficit would not exits if the Chicago Skyway had not been leased? Absurd. The CTA is another example (like SEPTA and PAT) of an inefficient urban mass transit system. Nor can Mayor Daley and the Chicago City Council’s decision to use the lease money for non-transit purposes be used to criticize the arguments for a lease of the PA Turnpike.

We have suggested that a Turnpike lease be used solely for roads and bridges – and put into a constitutionally protected fund.

2) Unlike some of those agreeing with us about the problems with Act 44, we do not oppose I-80 tolling in and of itself. We have, however, argued that a Turnpike lease alone would generate more money, perhaps twice as much, than Act 44 (with higher Turnpike Tolls and I-80 tolls). A Turnpike lease and I-80 tolling could generate perhaps four times Act 44. If I-80 tolling is deemed necessary, it should also be competitively bid – not given as a sweetheart deal to the Turnpike Commission. I-80 tolling – done our way – would also allow us to lower the gas tax (not raise it), as we should, if a road paid for by the gas tax is transition to a toll road.

3) A Turnpike lease was not “rejected by the legislature,” but never considered. To date, so far as I’m aware, no legislation has been introduced that would lease the Turnpike (save for Rep. Geist’s HB 555, which would allow it, but only with consent of the Turnpike Commission). We have advised lawmakers to take the initiative, and in doing so can set the parameters which will guide a Turnpike lease – rather than give Governor Rendell full discretion in crafting a deal.

4) A Turnpike lease could generate $1.2 to $1.6 billion annually, according to Morgan Stanley’s report, and perhaps as high as $3 billion. A Turnpike lease and competitively bidding for a tolled I-80 could perhaps double that revenue. This far exceeds the $965 million identified need for roads and bridges (Note: we oppose using cross-state toll roads to subsidize mass transit, and decry the diversion of almost half of Act 44 revenue into transit, particularly when it fails to adequately fund road an bridge needs).

But we have not, as Mr. Latham suggests, focused solely on leasing the Turnpike.

Mr. Latham’s bottom line,”imperfect as it may be, Act 44 at least gets us halfway there,” seem to echo Governor Rendell’s mantra of “I don’t care how, but get me more money.” Unfortunately, Act 44 provides far less revenue – and eschews cost saving reforms – than the alternative solutions offer.