A study done for state House Democrats has concluded that it is unwise to lease the Pennsylvania Turnpike to a private operator, as Gov. Rendell hopes to do.
Instead, the study supported the legislature's move to keep the Turnpike Commission, raise tolls on the turnpike, and introduce tolls on I-80.
The study, by three experts from Pennsylvania State and Harvard Universities, is to be formally released today in Harrisburg.
As Pennsylvania and New Jersey, among other states, wrestle with growing transportation needs, they are looking for ways to wring more money from their toll roads. Rendell has proposed following the lead of Indiana and Chicago, which leased toll roads to private operators in exchange for large up-front payments.
Last July, the Pennsylvania legislature passed and Rendell signed Act 44, a sweeping bill to provide about $950 million a year in new money for highways, bridges and mass transit. The money is to be raised by higher tolls on the turnpike and by converting I-80 from a free interstate to a toll road.
That law is opposed by residents, businesses and some politicians along I-80 in northern Pennsylvania, who say it would cripple their economy. Tolls on I-80, if approved by the U.S. Department of Transportation, could be in place by 2010.
The authors of the new study said they believe the state "is best served by staying the course with Act 44." They calculated the turnpike's value at $14.8 billion if leased to a private operator, compared with $26.5 billion if operated by the Turnpike Commission under Act 44.
The biggest difference is that the Turnpike Commission can borrow money more cheaply than can private corporations, the study's authors said.
They said future toll hikes could be lower if the turnpike were kept in public hands. And the turnpike could be used to serve public policy objectives rather than just generating money, the authors wrote.
The study also warned that future legislatures might raid the funds from a lease for other than "the original intended transportation uses."
Rendell's financial advisers reached opposite conclusions last year when they examined a turnpike lease.
Morgan Stanley, hired by the administration to examine various ways to "monetize" the turnpike, said a long-term lease was likely to raise the most money, perhaps as much as $19.8 billion for a 99-year lease.
Rendell's administration is now working with 14 teams interested in bidding on a long-term turnpike lease. The groups include toll road operators from Australia, Canada, Germany, Spain and Switzerland.
Spokesman Chuck Ardo said that bids would be received within a few weeks and that Rendell expects to submit the best leasing offer to the legislature.
"The study in question makes assumptions about the turnpike bid and lease plan that are not supported by the facts, since we have not yet asked for bids or negotiated a lease agreement," Ardo said yesterday. "The governor would rather wait until he has facts to consider before deciding the merits of the plan."
In New Jersey, Gov. Corzine concluded a different approach was best. He advocates establishing a "public benefit corporation" to operate the New Jersey Turnpike, the Garden State Parkway, and the Atlantic City Expressway, and using the money from higher tolls to pay down state debt and fund transportation projects.
The House Democratic study, "For Whom the Road Tolls: Corporate Asset or Public Good," was written by Gary J. Gray, a visiting finance professor at Penn State; Patrick J. Cusatis, an assistant finance professor at Penn State-Harrisburg, and John H. Foote, a senior fellow in Harvard's Kennedy School of Government.