531 Miles of Old Road

by Albert Paschall,
Senior Commentator, Lincoln Institute

Undoubtedly had Governor Rendell chosen to work in the private sector he would have been a salesman. Not just any salesman but the best in the business. Just look back in history. I was there in 1998 when he donned an elephant tie and the Democratic Mayor of Philadelphia sold the Republican National Committee on bringing its quadrennial convention to his city. Tally up all those hotel rooms, shopping trips, dinners and especially drinks and that had to have been at least a billion dollar sale.

Could be though that the Governor is losing his touch because his latest pitch is hitting a lot of resistance, not from any buyers, but from the sellers. The Governor’s idea of selling the Pennsylvania Turnpike doesn’t seem to have much traction around the state.

With good reason, 531 miles of old road isn’t a very sexy product. This time of year it needs frequent plowing that leads to it being riddled with potholes come spring. With people making 188 million trips on it a year the maintenance bills pile up.

You would think that the people of Pennsylvania would want to get rid of it. But that’s not happening fast. In the first place the predominant interests in buying it are foreign investors. Rich folks in places like Taiwan, Switzerland and Australia claim they would ante up to the tune of $10 billion for the highway. The governor claims this bonus would be used strictly to repair other roads and bridges around the state. But the concerns are out there especially when $10 billion hits Harrisburg all at once. Suppose Australia declared war on us could they close our turnpike? What if the Taiwanese made some bad investments and went bust do we get our road back? What if the Swiss investors know nothing about running a tolled highway and do a really lousy job, who do we complain to?

Now it’s hard to say what businesses the state should be in but maintaining highways and bridges is probably one of them. But it’s real easy to say what business it shouldn’t be in, wine and spirits.

If the Governor wanted a quick deal what could be easier than shedding the state’s monopoly on booze sales? Sure wealthy Australians like to buy highways but almost everybody buys wine or spirits. In the fiscal year that ended in June, Pennsylvania’s Liquor Control Board grossed $1.6 billion and that looks to be about triple the revenue that the turnpike had.

With 560 exclusive franchises and a wholesale system that services the entire span of markets: consumers, bars, restaurants and hotels, it shouldn’t be much of a stretch to grab a few billion by selling the state’s liquor stranglehold. Someday if Governor Rendell goes that route we might get our roads and bridges fixed and still own, for whatever its worth, America’s number one superhighway.

Albert Paschall
Senior Fellow
The Lincoln Institute of Public Opinion Research, Inc.