Turnpike Commission to owe $30 to $70 billion after Act 44

In our news release and media briefing yesterday, highlighting the patronage, power, and politics at the Turnpike Commission, we mention the exorbitant amount of debt the Turnpike Commission will issue under Act 44, justifying their continued existence. When the legislation was originally discussed, the Commission's spreadsheets implied they would borrow about $14 billion total, all which would be paid off within 40 years.

But with the revised proposal to toll I-80, the Turnpike Commission is now planning to borrow almost $44 billion. Worse yet, Pennsylvania Taxpayers will be paying this debt after the 50-year agreement to toll I-80 expires. We have calculated the outstanding debt after 2057 to be between about $38 and $73 billion, after paying $74 billion over the 50-year span). See the chart below or click here.




Since the bond issues for I-80 Capital Expenditures, I-80 Monetization (payments to PennDot), and Turnpike Monetization will not be paid off during this time (and are not calculated on the Turnpike Commission's charts), the Commonwealth Foundation calculated the estimated total payment. These estimates are based on a low end of 2.5x bonds issued to 3.5x bonds issued. While total debt service of 3.5 times the amount borrowed seems extreme, it is consistent with the payments of Turnpike Capital Expenditure borrowing, and the series of bond issues for I-80 CapEx, I-80 Monetization, and Turnpike Monetization that are paid off within the life of the deal.