Why Pennsylvania’s tolls have skyrocketed – and will continue to rise for the next 30 years
Ssurrounded by bushels of fresh local peaches, Lori Hanscom spent an afternoon greeting truckers, commuters and vacationers behind her fruit stand at the New Stanton rest area along the Pennsylvania Turnpike.
Her day was filled with friendly chatter about the weather, traffic, and seasonal fruits. One subject has always surfaced: the skyrocketing toll tolls.
Rates have increased each of the past 13 years and will continue to increase until 2050. The most recent 5% increase will take effect in January.
âYou would think there would be other ways to pay for it without bleeding people dry,â Hanscom said as he piled up peaches.
In 2004, the cost of the freeway between the Ohio border and the New Jersey line was just over $ 21. Today, the same ride costs $ 47 – for E-ZPass users. For other drivers, the cost is $ 95.30, paid for through Toll-by-Plate – a machine that scans license plates and sends an invoice.
The toll highway became cashless in June 2020.
Some companies, already squeezed by the covid-19 pandemic, have seen tolls drastically reduce their bottom line.
Don Mahalko, a trucker for Block One Logistics in Chicago, estimated the company has seen an 8% drop in revenue due to rising tolls in recent years.
Despite this, the toll highway remains the fastest route for Mahalko’s three or four month trips across the state.
âYou are a bit limited, so you have to use it to take the time to travel,â Mahalko said.
While experts agree that the ever-increasing tolls are worrisome, they are also troubled by the amount of debt incurred by the Turnpike Commission over the past decade. Most of it comes from annual payments of $ 450 million to the state’s Department of Transportation, which began in 2007 under Bill 44.
“You can’t keep driving because now the toll highway is behind the eight balls of debt,” said Frank Gamrat, executive director of the Allegheny Institute for Public Policy, a Castle-based think tank. Shannon.
Bill 44 was designed to help fund statewide transportation projects without raising taxes. The cornerstone of the plan was the conversion of Interstate 80 to a toll road as well as the creation of a lease agreement between the Turnpike Commission and PennDOT. The plan encountered a problem when the Federal Highway Administration rejected the plan for I-80.
As a result, a default clause in Bill 44 came into effect that required the Turnpike Commission to pay PennDOT $ 450 million per year, funded primarily by bonds. To date, the commission has paid $ 7.9 billion, racking up more than $ 14 billion in debt, according to records.
This amount equals the total debt of the state of Pennsylvania, according to records.
PennDOT officials say funding is crucial to maintaining the agency’s current level of service.
The money is used for everything from road improvement projects and public transportation, bike lanes, walkways, accessibility for people with disabilities and works in state ports, to said PennDOT Assistant Secretary Jennie Granger.
These payments have skyrocketed tolls, critics say.
âBefore Bill 44, the toll highway only increased tolls five times in 64 years,â according to a 2019 report from the state’s auditor general, the most recent detailed report available.
Annual increases are expected until at least 2050 for the toll road which opened in 1940 and has been touted around the world as an engineering marvel.
Turnpike spokesman Carl DeFebo Jr. said commissioners are reassessing the need to increase tolls each year.
The commission expects a 5% annual increase from 2022 to 25, a 4% increase in 2026, a 3.5% increase in 2027 and a 3% increase from 2028 to 2050, according to the records.
DeFebo said the financial impact on drivers is significant, which is why the Turnpike Commission and PennDOT are looking for other sources of funding.
âWe have to work together on a solution, and we are,â he said. “This solution in 2007 used toll revenues to help fund transportation within the Commonwealth.”
Compared to similar toll roads in other states, the net position of the Pennsylvania toll highway – a figure calculated by taking into account toll revenues and outstanding debt – is deteriorating rapidly, according to the Auditor General’s report.
The report showed that the overall net position of the toll highway was around $ 2 billion in 2007. When Law 44 came into effect in 2008, the toll highway began to decline financially. In 2017, that figure was $ 5.64 billion in the hole – the lowest, at around $ 5 billion, of the four states bordering Pennsylvania (Ohio, New Jersey, New York and West Virginia) that support large-scale toll highways.
The pandemic has worsened the financial situation of the commission.
Toll revenues fell in 2020 as fewer people commuted during the pandemic and more companies implemented remote work programs.
Despite an increase in traffic this spring and summer, DeFebo said, toll revenues are still around 10% lower than in 2019, where there was an annual increase of 3-4%.
He estimated that it will take three years for the toll highway to fully recover from losses linked to the pandemic.
âIt’s so hard to look in a crystal ball, but we don’t expect a quick comeback,â DeFebo said.
Nationwide use of toll roads fell about 60% in 2020, said Mark Muriello, director of policy and government affairs at the International Bridge, Tunnel and Turnpike Association. So far this year, it has bounced back in most places to meet or exceed 2019 levels.
Some people say their decision to avoid the toll highway has nothing to do with the pandemic.
Every weekday for 15 years, Linda Echard has driven from her New Stanton home to Monroeville for her job as principal in the Gateway School District. Lately, she’s been researching alternative routes as tolls doubled – now at $ 5.40 round trip.
âI’m not sure the price increases they’re getting are commensurate with (the Turnpike Commission) needs,â Echard said.
Hanscom told a similar story. She sharply criticized the $ 5 toll to make the short trip to visit friends and family in Jeannette or Irwin. Most of the time, it takes other routes to avoid the tolls.
Almost a decade ago, lawmakers took action to address the Turnpike Commission’s growing debt.
A law passed in 2013 increased annual payments to PennDOT starting in fiscal 2022 from $ 450 million to $ 50 million. Under Law 89, PennDOT is to receive $ 400 million from the state general fund to compensate for this loss.
But the damage was already done, according to experts.
From the first to the most expensive
Senate Majority Leader Kim Ward, a Republican from Hempfield who previously chaired the Senate Transport Committee, said the Turnpike Commission remained obligated to make smaller payments to PennDOT and continue to repay debt that ‘she had contracted over the years with much larger payments.
She said lawmakers were aware of the growing burden.
She pointed to Senate Bill 737, which was introduced this year to help cut costs for the Toll Highway Commission. Supporters said the measure could save the commission about $ 170 million per year by exempting it from environmental regulations that increase the cost of construction and upgrades.
Elizabeth Stelle, policy director of the Commonwealth Foundation, argues for a more radical approach.
âWe revisited the original idea of ââraising money for transportation, which was the privately run toll highway,â said Stelle, whose think tank examines the state’s problems from a government perspective. Free market. âWe are pleading for a return to this idea. We believe that a well-written contract is a great way to use resources like (the toll highway).
This idea, launched in 2007 by the government of the day. Ed Rendell caught fire when it was revealed that the likely lessor was a Spanish company that had partnered with a Wall Street firm.
âSo we ended up with this mish-mash bill that resulted in significant debt,â Stelle said. âWe are now the most expensive toll road not only in the country but in the world. ”
Since then, Stelle said, several private management deals have shown that such deals can benefit the public, given the strict parameters of rental terms and toll increases. She said even the deal struck by the Rendell administration would have set strict limits on toll increases – and well below the jumps seen since Bill 44 came into effect.
DeFebo said the Turnpike Commission is aware of its financial situation and has worked diligently to reduce operating costs. Faced with the impact of its state funding obligations and declining revenues due to a drop in traffic due to a pandemic, the commission dismissed 500 toll collectors and made collections without permanent cash. He also cut capital spending by 25%, froze hiring and offered voluntary retirements.
Toll revenues could be part of that solution, DeFebo said. But he added that it will take “a lot of wits and more than one source of income” to solve the problem. The Turnpike Commission estimates that eliminating tolls will save about $ 70 million per year – $ 50 million in reduced personnel costs and $ 20 million in reduced maintenance and operating costs.
As the commission seeks other sources of funding, it acknowledged the hardship for passengers caused by Bill 44 and the toll increases that followed.
âWe know this has been a lot for our customers to endure,â DeFebo said.
Hanscom said, while monitoring his fisheries, “There has to be a better way of doing things.”