Turnpike debt shapes up as potential fiscal crisis
The Philadelphia Inquirer’s transportation writer, Paul Nussbaum, wrote an interesting article this week regarding the Turnpike’s increasing debt.
The Turnpike Commission is now more than $7 billion in debt, Nussbaum reported, compared with $2 billion a decade ago and $4 billion in 2009. The burden will continue to grow, with the turnpike required to make payments until 2057 under Act 44, the transportation funding measure passed in 2008.
Act 44 was intended to raise $900 million per year in tolling revenue from the Turnpike and Interstate 80, but the application to toll I-80 was rejected. That still left the Turnpike with a $450 million annual obligation to PennDOT, to be divided among highways and public transit.
Auditor General Jack Wagner characterizes the Turnpike as “drowning in debt,” and even Turnpike CEO Roger Nutt agrees that this trend is not sustainable. Nutt, however, said the situation “is clearly not an immediate crisis.”
Whether an immediate crisis or not, Nussbaum’s article serves as a warning about where things are headed. Because the situation is not sustainable, several scenarios are possible, but they boil down to either reducing the Act 44 funding obligation, or raising the gas tax and other fees, or a combination of both.
Or, instead of a piecemeal approach, the state could adopt the Transportation Funding Advisory Commission recommendations, which were submitted more than a year ago.
If not addressed quickly, the Turnpike debt problem will become a more costly and painful issue to address, much like the impending state pension crisis, which began more than 10 years ago, but also was viewed as “not an immediate crisis.”
And as we have mentioned recently, according to the State Transportation Advisory Committee, the cost of addressing the transportation funding issue grows by nearly $1 million each day that the issue is not addressed.
# # #