The "fairness" of tolling I-80
Here is my letter to the editor in the Intelligencer Journal
Your July 28 editorial, “No free way,” implies that tolling I-80 is somehow more “fair” than a Turnpike lease. Your definition of fairness seems bizarre.
Tolling I-80 would not mean lower tolls for Turnpike drivers. The Turnpike Commission promises to raise tolls 25 percent next year and three percent annually thereafter (in addition to tolling I-80). The Fitch bond rating service downgraded the Turnpike Commission's rating, believing tolls will be dramatically higher. In contrast, a lease would cap tolls at a rate about equal to, likely less than, the Commission's plan.
Is it fair to charge drivers on both roads more, without generating additional revenue or ensuring better service? Obviously, a lower toll on both roads is a better option.
You also misstate facts about I-80 tolling, claiming, "all of this money will be used for bridge and road repairs on I-80." Actually, about 40 percent of I-80 tolls will fund other roads and bridges and mass transit.
Shifting to a toll system to fund transportation infrastructure might be a good move, but only with:
The backroom deal to give the inefficient and patronage-ridden Turnpike Commission authority to toll additional roads fleeces all Pennsylvania taxpayers and drivers.
- A reduction in the gas tax, which has been charged to construct and rehabilitate I-80. Tolls should replace our current tax system, not be in addition to what we currently pay.
- Competitive bidding to ensure that motorists and taxpayers receive the best deal -- in terms of state revenue and toll limits.
7 comments:
You miss a very important point with tolling I 80, in that all the money we spend now on repairs of the interstate (over 250 miles long [very, very large roadway requiring tens of millions of dollars annually in repairs]) will no longer be needed. So in addition to the 40% of the toll money being used for other work, there will be a very large amount of money left over, from no longer needing funds from the state to fix I 80. The idea of tolling is not to hurt business; not to hurt the local economy; and not to take more of the publics money. The idea is to make a road self sustainable, which if you think about, is the fairest of options. To use a road, you should chip in for repairs. Under a lease plan, the turnpike is held as being responsible, indirectly, for funding the entire states infrastructure needs. Which idea seems more "fair" to you?
On January 4, 2009 Turnpike tolls will increase 25% regardless of a lease. The idea that this toll increase is "fair" only if I-80 is also tolled is absurd.
Remember that, prior to Act 44, the Turnpike did not fund other roads across the state. The Turnpike was built and funded (primarily) with toll dollars, and was supposed to be a higher quality road as a result.
Act 44 first established to plan to use the Turnpike (raising tolls) and I-80 (tolling for the first time) to fund other roads and mass transit.
Put the question this way - which plan is "better"? One that increases Turnpike tolls and tolls I-80, or one that involves lower toll increases on the Turnpike under a lease - both generating about the same amount of revenue (including the gas tax revenue diverted to other projects)?
There is a very important difference between toll additions and hikes, when comparing tolling I-80 and the leasing of the turnpike. Additional tolls and increases under Act 44, will be used/given back to the state. Under the lease idea, these same toll increases will be given to foreign (not American) investors. Which would you prefer?
First of all, the lease insources (not outsources) $12.8 billion in private capital from investors who are both foreign and American. In exchange, the investors (both foreign and American) earn a profit after paying for the operation of the Turnpike and the required investments. Pennsylvania taxpayers are the beneficiaries of the upfront payment, and Pennsylvanians working on the Turnpike and the other projects funded by the upfront payment are also benefiting. Thus, the overwhelming majority of money is going directly to the people of Pennsylvania, not some foreigner.
After everything is said and done the upfront payment that the state will have to invest is will be closer to 9B. Secondly, how is an overwhelming majority of the money going to be given back to the state? Do the math on how much revenue the state would loose under a lease plan. And remember the lease is for 75 years. Do you really think that the 9B to “invest” will last for 75 years? I could see the upfront money being completely depleted within ten years. Lastly, lets remember that American business has ~ 41%, that is not close to “overwhelming”, and yes foreign business would be the bigger winner not the citizens of Pennsylvania.
I won't spend time in debating the investment amount. The fact is that it is a $12.8 billion payment. Yes, some of this will be used to pay off the debt of the PTC that can't just be assumed by the private entity. But you are arguing that we should only look at the final investment side of the ledger. This is a skewed view at best, and you know it.
As for the money lasting 75 years, of course that depends on how the General Assembly and Gov decide to spend the money. If you don't trust them with the lease payment, then how can you trust them with the Act 44 payments? Same argument applies. You can't have it both ways.
Regarding the overwhelming majority of money going to Pennsylvanians, in addition to ignoring the upfront payment and where those investment earning go (into PA's transportation infrastructure and the Pennsylvanians employed in that industry) you are ignoring some business basics. First, "profit" for any company is what exists after paying your costs. The majority of revenue in the form of tolls is going to pay for the operation and maintenance of the toll road. Pennsylvanians employed by the Turnpike operator are the beneficiaries, not some foreign company. Then the remaining amount is used to pay off the borrowed billions in capital and interest. Finally, this company will also being paying income taxes that the PTC is currently not paying.
Two questions for you: First, do you think the hundreds of thousands of jobs that are already in PA due to foreign businesses should be kicked out?
Second, if you are so concerned about the profits made off of the Turnpike tolls, why don't you have the same concerns for the Turnpike Commission? It is the PTC and all its cronies who will have control of an even larger pot of money (with I-80 and the Turnpike tolls) that will cost drivers even more money at the end of the day.
the basic question here is do we want more or less government control. so putting all the "business" aside, where do you stand? in addition, i personally view this deal as a transfer of wealth. i find our state and nations infrastructure to be a blue-chip governmental issue. albeit, infrastructure being one of the few exceptions, where I like having the help of congress!
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