PA Turnpike Escapes ‘Catastrophic’ Lawsuit, But Remains Heavily In Debt

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HARRISBURG, PA (WSKG) – The Pennsylvania Turnpike got some rare good news on Thursday.

A federal judge dismissed a lawsuit over the annual increases to tolls the Turnpike Commission levies on drivers. The suit, from a pair of out-of-state trucking and driving advocacy groups, sought damages of up to $6 billion.

(AP Photo/Matt Slocum, File)

The toll road is already carrying north of $11 billion in debt, and the prospect of having to pay damages of that magnitude could have, according to Transportation Secretary Leslie Richards, been “catastrophic.”

That’s because the turnpike’s woes don’t affect the toll road alone.

The commission’s finances are complicated, and closely intertwined with PennDOT and the many projects it oversees around the state.

In 2007, the legislature and then-governor Ed Rendell passed Act 44, a law that mandated the commission pay $450 million to PennDOT every year. The money goes toward transportation-related projects around the commonwealth. The turnpike took on debt in order to make that annual obligation–today, about $6 billion of its total load stems directly from its PennDOT payments.

The Transportation Department relies heavily on that money.

During the lawsuit, for instance, it became too risky for the turnpike to take on new debt, so it was forced to delay three quarterly payments to PennDOT. The department said losing that $337.5 million put a number of its major projects in jeopardy.

In order to service the debt, the turnpike has raised tolls every year for the last decade–a 200 percent increase overall.

In 2013, the legislature passed an update to Act 44. Act 89 began routing all PennDOT’s cash for the turnpike to mass transit projects, and crucially, dictated that in 2022 the commission’s obligation would be reduced to just $50 million annually. The rest is slated to be filled with revenue from vehicle sales taxes.

But that doesn’t mean the tolls will go back down.

The turnpike projects they will keep increasing every year through 2044.

All of this formed the basis for the now-dismissed lawsuit against the turnpike. The National Motorists Association and the Owner Operator Independent Drivers Association Inc. argued the Commerce Clause of the US Constitution prohibits the use of turnpike proceeds for unrelated projects.

They also claimed the tolls are so expensive, they inhibit free travel. While it isn’t expressly protected in the Constitution, the plaintiffs noted the U.S. Supreme Court has held the “‘constitutional right to travel from one State to another’ is firmly embedded in our jurisprudence.”

Pennsylvania Middle District Judge Yvette Kane ultimately relied on case law that says the tolls are fine because they target everyone, not just interstate travelers. Plus, she said the roadway, regardless of its relative expense, is not the only way to travel through Pennsylvania.

A spokesman for the Turnpike Commission confirmed it has been notified the trucking groups plan to appeal.

Commission’s CEO, Mark Compton said in a statement that while he’s pleased about the provisional victory, the turnpike isn’t out of the woods.

The lawsuit, he said, “propelled our burdensome funding obligation to the commonwealth (and its effect on our customers and finances) into the limelight, revealing an unsustainable obligation that must be addressed to ensure the fiscal wellbeing of the PTC.”

He said for now, the debt load is manageable. But he added, he doesn’t think the commission can “continue down this path unless something changes.”

PennDOT agreed.

“Turnpike tolls are too high,” spokeswomAn Erin Waters-Trassat said. “Current funding levels will not allow us to develop new projects or address the full portfolio of needed repairs.”

Most Pennsylvania officials–from Democratic Governor Tom Wolf to Republicans and Democrats in the House and Senate–appear to agree on at least the existence of a problem.

But at this point, there is little clear consensus on a solution.

This week, the Turnpike Commission, PennDOT, and the Southeastern Pennsylvania Transit Authority released a collaborative report that, for the first time, laid out several options for fixing turnpike finances.

Though it focused on Philadelphia and its surrounding suburbs, the solutions it offered would impact the whole state.

For instance, it suggested the $450 million payment the turnpike makes every year could be replaced with a 0.25 percent increase to the sales tax, or a 0.10 percent boost to the personal income tax. Hiking the real estate transfer tax, it said, would net at least $215 million annually. Other options included new fees for Uber and Lyft rides, some form of congestion pricing, fees on electric vehicles, and higher fees for tires and vehicle leases and rentals.

Most of those suggestions likely won’t fly in the GOP-controlled House and Senate, where lawmakers have been steadfastly opposed to tax increases of any sort.

Spokespeople for House and Senate Republicans both said it’s too early in the state budget process to comment on any specific proposals. But, Martina White, the Philadelphia Republican who chairs the House subcommittee on public transportation, confirmed she’s paying attention to the issue.

“I believe we must value taxpayer dollars while ensuring that necessary investments in our transportation infrastructure are made so Pennsylvania can become more economically competitive and create good paying jobs for Pennsylvania workers,” she said in a statement.

Governor Wolf has pitched his own plan, dubbed Restore Pennsylvania, to bulk up the state’s infrastructure investment.

While it’s not necessarily aimed at helping the turnpike, it does include funds for the public transit expansions currently covered by the commission’s payments to PennDOT.

However, most Republicans have rejected the governor’s proposal, as it is funded primarily through a severance tax on the natural gas industry that they broadly oppose.

The deadline to finish the budget for the next fiscal year is June 30th.