Strike Three: Tolling I-80 is Out!

Member Group : Allegheny Institute

For the third time Pennsylvania’s application to toll Interstate 80 (I-80) has been denied by the Federal Highway Administration (FHWA). Transportation Secretary Ray LaHood stated that the FHWA "based (the) decision on what is allowable under federal law."

In 2007, shortly after the Act 44 transportation funding bill was passed, we pointed out that tolling I-80 "is a highly contentious issue and could face substantial difficulties in obtaining Federal approval, (Policy Brief Vol. 7 No. 46)". In July 2008 we commented on the FHWA letter rejecting the Turnpike Commission application to toll I-80, (Policy Brief Vol. 8, No. 46). Federal law is very clear—tolling an Interstate highway is permissible under the Interstate System Reconstruction and Rehabilitation Pilot program (ISRRPP) only if the toll revenue is applied to the maintenance, operations, and improvements of the highway. Tolling a Federal highway to raise money for other road projects and/or to subsidize mass transit is not allowed. In fact, the FHWA rejection memorandum stated "there is no basis to conclude that the proposed lease payments (between the Turnpike Commission and the Pennsylvania Department of Transportation) are legitimate operating costs (for I-80)".

As we mentioned later in 2008 (Policy Brief Vol. 8 No. 61), the FHWA’s main focus was on the lease agreement between the Pennsylvania Department of Transportation (PennDOT) and the Pennsylvania Turnpike Commission. Prior to making the final determination that the lease payments were questionable, the FHWA repeatedly asked both agencies to justify the lease price, but no justification was forthcoming. In addition to the lease, they cited an "absence of sufficient traffic and revenue studies and the adequacy of the financial plans." Unfortunately, adopting a scheme first and worrying about the details or consequences later is all too commonplace among policy makers.

One would think that under the guidelines of the law and the questions raised by the FHWA the Commonwealth would have altered its plans to respond to the FHWA’s objections. However, apparently because the first two denials came from an FHWA under the Bush Administration, the Governor was more hopeful there would be a different response from Obama Administration officials. If so, what does this say about the Governor’s view of the President’s people? Was he hoping the Obama Administration would ignore the law and let the tolling application slide through with a wink and a nod?

The decision to try again after two failures speaks volumes about Pennsylvania’s administration and many in the Legislature regarding what they expect from their own party. Indeed, in May, 2009, we predicted the Obama administration would not ignore the requirements of the ISRRPP and therefore would not approve the Turnpike plan (Policy Brief Vol.9, No.32). The statutory language is simply too clear and explicit for that to happen. Moreover, the third tolling application must have put the Secretary of Transportation in a very awkward position, especially in view of the extraordinarily dismissive tone of the earlier FHWA rejections.

Clearly, the plan to toll I-80 should have been a non-starter from the outset. However, not only did the Governor and Legislature include it in the Transportation Funding Act of 2007 (Act 44), they made it the linchpin. They were so confident that tolling I-80 would be approved by the FHWA that they drew up the lease agreement between the Turnpike and PennDOT and issued bonds. The Governor, the Turnpike Commission and the Legislature have acted irresponsibly in this matter to the state’s great cost and embarrassment. A couple of phone calls by a legislative aide to the FHWA during the drafting of Act 44 could have possibly prevented this three year long fiasco.

The plan to toll I-80 was the height of irresponsibility and arrogance for which the citizens of Pennsylvania are now going to get the bill. There will be no real effort to make mass transit systems in Pittsburgh (Port Authority) and Philadelphia (SEPTA) more efficient or less expensive. After all, these agencies were to have been prime beneficiaries in this funding scheme. In fact, the during the latest contract negotiations, the Port Authority won almost no short term concessions—certainly none that will appreciably reduce costs—and the long term concessions are useless for the immediate crisis. Undoubtedly, Pennsylvania taxpayers will be hit up again to bail out these large transit systems. And still there is no real discussion of outsourcing or privatizing routes to improve service and lower cost.

Nor is there any talk of cutting expenditures in the Commonwealth’s general fund budget to deal with the now worsened fiscal crisis. Indeed, the Governor wants to boost education spending by more than $300 million over last year’s level. One would think the state had no crushing issues to deal with in view of the Governor’s single minded attempts to protect teacher pay and get more hired. Remarkably, one Legislator noted that if any road and bridge projects were to be cut, they should come from the northern tier of the state (where I-80 is located) since they were most vocal in their opposition. There were plenty of people from other places across Pennsylvania who objected, should their funding be cut too?

But more to the point, the opposition from those in the I-80 corridor was not the deciding factor in the FHWA decision—the plan was illegal under Federal law and was rightly turned down for that reason. Watching the proposal get rejected for the third time brings the words of the poignant country song to mind, "What part of ‘No’ don’t you understand?"
Jake Haulk, Ph.D., President Frank Gamrat, Ph.D., Sr. Research Assoc

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