New analysis of where I-80 tolls will go

While I have previously posted that I-80 tolls will mostly go to other projects, rather than stay on I-80, the Turnpike Commissions new application for tolling I-80 changes that (click here for original data and here for new spreadsheets) – about 30% of I-80 tolls go to pay PennDOT over the 50-year plan (and 41% over the first 40 years, which is the end of the orginal analysis). Of course, a number of other changes have been made to the numbers, that make the new plan as bad (or worse):

  • Payments from I-80 PennDOT  disappear after 2047 (following a decline).  All the Act 44 revenue will come from the Turnpike Cashflow after this time; Turnpike Cashlow is projected to increase 150% from 2038 to 2048.  How? Probably, as Fitch Ratings Service projectsmassive toll increases.
  • The “ending suplus” is near zero during the first 40 years, as opposed to a hefty cushion previously.  This may or may not be important – it depends how accurate their estimate of toll revenue are.  Since the payments are set by law and by bond agreements, the only unknown is the revenue side.  If their estimates are low, they may need higher tolls to generate enough revenue to pay their debt and PennDOT payments.
  • Borrowing against I-80 tolls goes from about $2 billion in the original proposal to $27 billion under the new plan.  Half of the toll revenue goes into debt payments.
  • Given the new emphasis on borrowing for both I-80 capital improvements and to make PennDOT payments, the Turnpike Commission will owe tens of billions of dollars at the end of the fifty-year lease (my back-of-the-envelope estimate is around $17 billion in outstanding debt). Granted, $17 billion in 2057 is much less than $17 billion today, but the original plan – like the original idea of the Turnpike several decades ago – was that it would be self-sustaining and out of debt by that point.  Instead, leasing I-80 to the PTC will be just another drain, burdenning future generations with more debt.

Here is the updated spreadsheet analysis.