MassPike Ponders Cuts

As the tolls increase, so do the spending cuts.Massachusetts Turnpike Authority head Alan LeBovidge last week announced possible cost-cutting initiatives, part of MassPike’s goal to gain fiscal stability.At the end of October, the authority approved a 25-cent roadway increase at Massachusetts Turnpike extensions, bringing the toll to $1.25, and increasing tunnel charges by 50 cents to $3.50. Under its bond agreements, the agency was obliged to raise tolls by Jan. 1 to meet increasing debt service costs. Even with the toll hikes, MassPike faces a roughly $35 million shortfall for the next two years, which officials said they will fill with operating cuts, cash reserves, and debt restructuring. LeBovidge, who joined the authority last month as its executive director, will evaluate eliminating overnight toll collection on the Western Turnpike, as the cost of obtaining late-night fares outweighs the total revenues.“It costs more to collect those revenues than the revenues themselves,” said MassPike spokesman, Mac Daniel.The agency may also save $1 million per year if it ends a roadside assistance program, although Daniel said there is a public safety aspect to consider in terminating the service. Other potential spending cuts include eliminating staffing at tourism booths located within roadside service plazas and evaluating consulting contracts. LeBovidge believes the authority may have the ability to evaluate some programs — such as fast-lane usage — internally, without the cost of outside assistance.The authority is currently working on possible savings calculations and any program cuts will need board approval. Its next board meeting is set for Jan. 14, according to Daniel.MassPike oversees the Metropolitan Highway System and the Western Turnpike. Moody’s Investors Service rates the authority’s outstanding $1.3 billion of MHS senior revenue bonds A3 and its outstanding $968.8 million of subordinated revenue bonds Baa1, both with a negative outlook. Fitch Ratings assigns BBB-plus and BBB ratings to the MHS senior and subordinated bonds, respectively, with a stable outlook. Standard & Poor’s does not rate the credit.