When Gov. Edward Rendell first proposed the leasing of the Pennsylvania Turnpike for an upfront sum of cash last February in his budget address, the General Assembly showed no appetite for it — until now.
Last week, when the General Assembly returned from winter break, Senator John R. Gordner and Senate President pro tempore Joe Scarnati, both Republicans, expressed interest in turnpike leasing plans. Both are uncertain about when and whether tolling of I-80 under Act 44, which requires federal approval, will be implemented.
Act 44 allows the Pennsylvania Turnpike Commission to issue up to $5 billion of special revenue bonds with no more than $600 million of those bonds to be issued in one year. In a “public-public” partnership, the PTC leases I-80 from the Pennsylvania Department of Transportation, starting with a $750 million lease payment for fiscal 2007, and begins tolling that road, if approved by the federal government.
“It’s becoming clearer with each passing day that we do not expect the federal government to act favorably on the Turnpike Commission application to toll I-80,” Gordner said.
Gordner circulated a co-sponsorship memo last week, and he’s expecting to introduce legislation in the next two weeks that would repeal Act 44 and propose a public-private partnership, or P3, involving leasing the turnpike, he said in an interview.
Gordner’s legislation will propose splitting the Pennsylvania Turnpike into three sections and lease them out for 50 years. The sections would be divided from Harrisburg to the Ohio border, Harrisburg to the New Jersey border, and the Northeast extension from Philadelphia to Scranton. The entities that bid on leasing a section or sections of the Turnpike would have to be U.S.-based and the majority would have to be American-owned.
The legislation would not preclude a foreign investor from being involved with leasing the turnpike; however, it could not have more than a 49% interest, Gordner said. He said his proposal could provide between $1 billion and $1.3 billion per year, as opposed to Act 44’s $900 million per year.
“I’ve now had six months to explore the issue,” Gordner said. “I’m comfortable with believing that a private company can do as good a job or better of running our turnpike than the existing Turnpike Commission, as well as provide more money for roads and bridges and mass transit.”
Scarnati, who originally supported Act 44, also had said he, too, was looking into alternative plans, including the leasing of the turnpike, and will likely introduce legislation in the next few weeks.
“We’ve been working on what I like to say is a hybrid model, working with the revenues from the turnpike, and making sure that these vast revenues can be brought in on an expanded turnpike tolling, that we keep those revenues here in Pennsylvania, instead of sending boatloads of money to a foreign company in a foreign country,” Scarnati said last week.
While Rendell’s office is pleased to see proposals for leasing the Turnpike resurface, spokesman Chuck Ardo said that Rendell wants to see the bidding process open to all who are qualified, foreign or not.
“It is amazing how prescient the governor was,” Ardo said. “He believed the leasing of the turnpike was the best option when very few others agreed with him.”
Rendell plans to ask for bids for leasing the turnpike in the next couple of months, and he hopes to have a proposal to the legislature before its summer recess in June, Ardo said.
Meanwhile, House Transportation Committee Chairman Joseph Markosek, a Democrat, and other House Democratic leaders Thursday announced the commission of a study regarding the leasing of the Pennsylvania Turnpike.
“Act 44 represents a carefully deliberated and realistic path to repairing, maintaining and improving our transportation infrastructure, most notably our deteriorating roads and bridges,” Markosek said in a press release. “But it would be irresponsible to not prepare ourselves if forced to deliberate an option that is now receiving serious consideration from the governor and some of our Senate counterparts.”
Markosek introduced the legislation that was signed into law by Rendell and became Act 44 last year.
John Foote, a senior fellow at the Kennedy School of Government at Harvard University who has written extensively on toll road concessions, will be the principal author of the study. Gary Gray and Patrick Cusatis of Pennsylvania State University additionally will be involved in the study, which is expected to cost up to $75,000 and be completed in mid-February.
Still, the commonwealth is moving forward with implementing Act 44. The PTC is conducting economic impact, environmental, and traffic and revenue studies regarding the tolling of I-80, PTC spokesman Carl DeFebo said.
“I am confident that Act 44 will remain in place and we will eventually toll I-80,” Markosek said in an interview. “It is the law of the land right now, so if we want to obey the law, we need to move forward with Act 44.”
