Leasing the turnpike is a better way for Pa.
Howard Yerusalim served as secretary of transportation under former Pennsylvania Gov. Robert Casey It's a fact: Pennsylvania's transportation system needs major improvements. The commonwealth leads the nation in structurally deficient bridges, while our roads received a "D" rating by the American Society of Civil Engineers.
served as secretary of transportation
under former Pennsylvania Gov. Robert Casey
It's a fact: Pennsylvania's transportation system needs major improvements. The commonwealth leads the nation in structurally deficient bridges, while our roads received a "D" rating by the American Society of Civil Engineers.
Across the state, Pennsylvania drivers know the price of our aging highway network. Road closures and detours - on dangerously decrepit structures - mean longer commutes and more money spent at the gas pump.
In November 2006, the bipartisan Transportation Funding and Reform Commission concluded that the commonwealth needed $1.7 billion a year to tackle the problem.
It isn't just a matter of expense. As we learned in last year's Minneapolis bridge collapse, neglected public infrastructure costs lives. Nearly 60 Philadelphia-area bridges - including seven on the Pennsylvania Turnpike and 15 on Interstate 95 - are rated as being as bad as or worse than the Minneapolis span.
In an effort to raise more money for Pennsylvania's transit needs, Gov. Rendell last year signed legislation adding tolls to Interstate 80. The law, known as Act 44, promised to generate up to $750 million annually for highways, bridges, buses and subways.
That approach was a step in the right direction. But the necessary federal approval of tolling I-80 is stalled. Additionally, the law does not put any limit on turnpike toll increases, which means Pennsylvania drivers have no guarantees when it comes to the cost of getting around the state.
The long-term lease of the turnpike announced by Rendell offers a much better deal for Pennsylvania. A team led by Citibank and Abertis won the competitive bidding process with a pledge to pay nearly $13 billion for the 75-year lease.
After paying off current debt, that money is expected to pay out more than $1 billion a year for state transportation projects, based on the 20-year rate of return in the State Employee Retirement System. Compared with Act 44, the lease arrangement provides hundreds of millions more for roads and bridges and a savings of 30 percent for drivers who won't face tolls on I-80.
The new consortium, known as Pennsylvania Transportation Partners, has a wealth of experience operating roads, bridges and airports worldwide.
The agreement is not a sale. To repeat: This is not a sale. Pennsylvania will continue to own the highway, have full authority in emergency situations and receive independent audits paid for by the consortium. Pennsylvania Transportation Partners must meet the highest safety and quality standards.
The legally binding contract caps annual toll increases on the turnpike to 2.5 percent or the rate of inflation. There's no limit on toll increases by the Pennsylvania Turnpike Commission, although the agency has indicated it expects to hike fees at least 3 percent a year. The lease agreement also maintains all current union contracts and existing projects.
U.S. Transportation Secretary Mary Peters enthusiastically notes that the consortium "would be subject to some of the most rigorous performance requirements of any road in the United States, rigid constraints on their ability to raise tolls, and a requirement to invest billions of dollars in the facility."
At a time when many Americans are legitimately concerned about sending jobs overseas, the turnpike lease is the opposite. In this case, a highly respected foreign company, partnered with a prestigious American investment firm, will pour billions of dollars into Pennsylvania.
Already, similar public-private lease arrangements are working in Indiana and the city of Chicago, demonstrating that sound public-private partnerships make bipartisan sense. With the interest from lease arrangements, Indiana has paid off bonds and delivered $150 million for county transportation needs, while Chicago has invested in community projects, created a rainy day fund, and paid down its debts.
Critics have suggested the consortium unfairly benefits from federal tax law that allows companies to write off large investments. For those concerned with the tax code, I suggest a lobbying trip to Washington.
In the meantime, consider this: Is it such a bad idea to offer the private sector incentives to invest in our ailing transportation system? For my money, $12.8 billion in the bank, safer roads and bridges, no tolls on I-80, and expanded public transit seem to be no-brainers.