Failure to Lease Turnpike will Cost Taxpayers

Member Group : Commonwealth Foundation

"What did you do when you had the power?"

Those words define the legacy of my former boss, the late Gov. Bob Casey. It was a question he would often ask me and other members of his cabinet during his eight years as the commonwealth’s CEO. He asked the question to keep us sharp, to make sure we were always acting in the best interest of Pennsylvanians during the brief time we had to serve.

It’s a question I’d now like to ask legislators who failed to seize on an historic opportunity to immediately address our state’s transportation infrastructure crisis. And, believe me, it is a crisis. Faced with a $1.7 billion transportation funding shortfall, Gov. Ed Rendell came up with a creative solution: leasing the Pennsylvania Turnpike to a private investor group for an upfront payment of $12.8 billion, and a total package worth nearly $22 billion.

Many of the commonwealth’s legislators, like House Appropriations Chairman Dwight Evans, courageously applauded the governor’s bold strategy and worked hard to find support for it among their colleagues.

Unfortunately, others offered false solutions—like the doomed bid to toll I-80—to mask their desperate ploy to preserve a bastion of bureaucratic corruption and patronage, the Pennsylvania Turnpike Commission.

While I can respect those who had an honest disagreement with the principle of leasing the turnpike, it at least deserved an open and honest debate on its merits.

The failure of the Legislature to act on this extraordinary opportunity—the largest private investment of its kind—has led the bidders, a consortium led by Abertis and Citigroup, to withdraw their offer because some in House and Senate leadership told them the Legislature was off limits for any discussion, debate or vote on this issue.

In a cash-strapped world, how long could we expect the group to leave billions of dollars on the table, when other states and municipalities might welcome an investment of this magnitude far more readily than Pennsylvania? Only last week the governor of New York announced his intention to explore public-private partnerships for such important public assets as the Tappan Zee Bridge.

The fiscal consequences for Pennsylvania will be severe to be sure. Recent press reports, including a front-page story in the Philadelphia Inquirer—"Rendell, Corzine order cuts in trying times"—have chronicled the crunch facing the commonwealth. "Rendell has ordered a number of austerity measures to keep Pennsylvania’s budget balanced … the Commonwealth’s September revenues were $163.8 million less—6.5 percent—than expected," the subheading stated.

With the state and the country facing an uncertain economic future, a private investment of billions of dollars to improve infrastructure would have created thousands of jobs and improved Pennsylvania’s productive capacity. And the glaring truth is the infrastructure crisis cannot wait: It is an issue of safety on the commonwealth’s roadways.

We cannot expect funding from Washington; the municipal credit markets have evaporated, forcing some states to stall highway projects midstream.

Who then will pay for the needed repairs and projects? I’m sure you won’t be surprised to learn it will be you — the Pennsylvania taxpayer.

And so what are we left with? The Turnpike Commission has raided the coffers and avoided any business realities in the last two years, doing anything they could to save themselves.

Their cost of debt is skyrocketing far more than the 4 percent they had budgeted for and the traffic is down more than 4 percent in the Philadelphia region.

It’s time the legislature demands a full audit of the books at the turnpike.

I hope the constituents of those legislators who lacked the courage to embrace an investment opportunity we might never see again will ask the same question of those who purport to represent their interests: "What did you do when you had the power?"

# # #

Howard Yerusalim was secretary of the Pennsylvania Department of Transportation under Gov. Robert P. Casey. He was also a member of the Pennsylvania Turnpike Commission and is currently vice president for Infrastructure at MMFX Technologies Corp. For more on the Turnpike Lease, visit and The Commonwealth Foundation is an independent, nonprofit public policy research and educational institute based in Harrisburg.

Permission to reprint is hereby granted provided the author and affiliation are cited.

Commonwealth Foundation | 225 State Street, Suite 302 | Harrisburg | PA | 17101