The Massachusetts Turnpike Authority Friday approved toll hikes that will generate nearly $100 million of additional revenue for the authority to help meet operating needs and rising debt service costs.
Officials could implement the toll increases by February or March after holding public hearings as required by law. The hikes will enable the authority to maintain debt service coverage at 1.28 times in fiscal 2009 on $2.2 billion of Metropolitan Highway System debt and approximately 1.6 times coverage in future years, according to MassPike's chief financial officer, Joseph McCann.
Debt service coverage on the debt cannot fall below 1.15 times as stipulated in bond agreements, according to a MassPike presentation on the toll increases.
The board weighed in on two different tolling scenarios, one that would generate $100 million of additional revenue per year and another that would implement smaller toll increases yet bring $70 million of added revenue annually.
Under the $100 million plan, cars will pay 75 cents more on turnpike extensions in the Boston area, bringing that toll to $2. Tunnel charges will double to $7 from $3.50 for passenger vehicles. The more modest $70 million plan would increase turnpike extension tolls to $2 as well, but only raise tunnel charges to $5.50, a $2 increase.
The $100 million plan passed in a 4-to-1 vote.
Board member Mary Connaughton said she voted against the higher toll plan because it puts added stress on toll payers when the $70 million plan would still maintain proper debt service coverage for the authority. Connaughton questions implementing higher tolls as Gov. Deval Patrick and his administration prepare to dismantle the authority and fold it into two other government agencies in an effort to save costs.
"I thought $100 million was too high, given the fact that the agency's future is so uncertain given the governor's plan, and leaving a large tolling structure in place didn't seem to make good sense to me at this point in time. I thought the $70 million was a better option."
Patrick's plan involves the Massachusetts Port Authority taking over management and operations of the MHS, which runs throughout the greater Boston metropolitan area and includes the Central Artery project, also known as the Big Dig. That system has $2.2 billion of outstanding debt. In a Nov. 13 opinion piece in the Boston Globe, the governor addressed how that debt would be handled in the event of MassPike's termination.
"Restructuring the Big Dig debt will involve spreading the burden more equitably through a combination of tolls, MassPort revenues, registry fees, and savings from eliminating the Turnpike Authority," Patrick wrote in his op ed article.
Oversight of MassPike's other roadway, the Western Turnpike, would divert to the Massachusetts Highway Department and the commonwealth would take over its $162 million of outstanding debt.
At the meeting, MassPike officials also released future cash flow projections and pegged the authority's average annual deficit over the next six years, fiscal 2009 through fiscal 2014, at $15.9 million. The authority currently faces a $12.1 million deficit this year and a $18.1 million shortfall in fiscal 2010.
