Lease the turnpike

Pennsylvania Transportation Partners has an op-ed in the Post-Gazette on leasing the Turnpike. Here are some key points:

Pennsylvania Transportation Partners’ $12.8 billion bid to manage the turnpike is the right step to get there. Not only would Pennsylvania receive upfront money to help meet its transportation needs but an additional $11 billion would be invested in the turnpike itself. There’s more — PTP would pay significant state corporate tax, a tax not paid by the turnpike commission. …

• The net economic value of the proposed lease is close to $23 billion. This includes the $12.8 billion upfront payment, the largest-ever private investment of its kind, and $11 billion in capital improvements to the turnpike. When Mr. Markosek discounts $2.5 billion of the upfront payment because it will be used to pay off the commonwealth’s infrastructure debt, he is suggesting that shifting that debt service burden to Pennsylvania taxpayers is preferable to having it funded by private investors.

• The assertion that funds provided by Act 44, enacted last year as a stopgap measure to meet transportation funding needs, would be greater than those under the proposed lease is false. …

• The lease agreement would limit toll increases. The investor group would earn profits by more efficiently managing the road. The turnpike commission, on the other hand, has unlimited authority to increase tolls when it needs to generate cash flow. If there is an increase in finance costs, decrease in traffic or increase in construction costs, the turnpike commission would have to increase tolls to meet the aggressive annual payments promised under Act 44.

• Mr. Markosek questions the accountability of private investors, but PTP would be motivated to
improve turnpike customer experience, safety and service. The lease agreement ensures accountability and provides for regular auditing and monitoring, with the $12.8 billion up-front payment at stake.