Indiana Toll Road update
Several years ago, as Pennsylvania was considering the merits of selling or leasing the Turnpike, proponents pointed toward Indiana as a successful example of leveraging transportation funding through privatization. That grass is always greener on the other side of the fence, right?
In 2006, Indiana entered into a 75-year lease with a consortium of foreign investors, who paid $3.8 billion to operate the Indiana Toll Road. The state then embarked on an ambitious highway construction program.
According to the Fort Wayne Journal Gazette this week, nearly all of the $3.8 billion will have been spent or allocated by the time the state’s next governor takes office in January, portending a significant drop in the highway program and putting Indiana back in the same boat as many other states, including Pennsylvania.
Many opponents of the Pennsylvania Turnpike’s privatization cited the challenges of protecting the principal once the up-front payment was received. In fact, and in retrospect, the 2008 economic crash almost certainly would have resulted in significant erosion of the principal and significantly lower returns on the investment than had been projected.
To many in Pennsylvania, it is not clear why Indiana never even attempted to preserve the proceeds of its toll road lease, and instead began a short term construction initiative.
“Some suggest that Indiana is right back where it started, but in some ways it’s even worse off,” said PHIA Managing Director Jason Wagner. “Besides facing a major funding gap in the near future, Indiana won’t be able to leverage its toll road to generate revenue again until 2081. PHIA has long held to its position that only a long-term, comprehensive funding solution will solve the transportation crisis we face. Enacting short-term solutions such as this will do little but delay the inevitable realization that additional, growth-oriented funding is the only way to solve our infrastructure woes.”
To read the Journal Gazette article, click here.
Road and Bridge Safety Award Program Now Open to First Class Townships and Cities
2011 PLCM Winner - Ott Street Bridge, Allentown, Pa.
Each year the Pennsylvania Highway Information Association (PHIA) and the Pennsylvania Department of Transportation (PennDOT) team with various state organizations to recognize the best road safety or bridge improvement projects undertaken across the state. Eligible projects are those in which most or all of the safety improvements were completed in 2011. The competition recognizes not only major, high-cost projects, but any improvements that have increased public safety. All entries are graded in four categories: Safety, Resource Innovation, Benefits of Improvements, and Cooperation.
Awards have already been presented to 2nd Class Townships and Boroughs. Applications are now open to First Class Townships and Cities and are being jointly sponsored by the PA State Association of Township Commissioners (PSATC) and the PA League of Cities and Municipalities (PLCM). For more information on the program or to download an applications, click here.
Entries are being taken until May 23, 2012.
PennDOT issues $152 million in construction projects during April
The state Department of Transportation (PennDOT) bid just over $152 million in projects in April bringing the year-to-date total to slightly over $489 million. At this same point in 2011, PennDOT had bid just over $543 million.
PennDOT made a 2012 construction year forecast at $1.5 billion due to a decrease in state funding and stagnant federal funding. For perspective, a $1.5 billion letting program was the same volume as in 2006. In 2011, PennDOT ended the year with $1.8 billion in lettings. It is important to note that just a few years ago, PennDOT’s 2009 lettings were $2.8 billion due to the billion dollars in economic stimulus funds, which have been completely spent.
To view the full report and year comparisons, click the link below.
*The report lists the total contracts awarded at each letting date, a comparison to the same period in the previous calendar year, and letting adjustments made since the previous month. PHIA staff will track PennDOT lettings throughout the year and provide monthly updates.
National Work Zone Safety Awareness Week Begins April 23
National Work Zone Safety Awareness Week is April 23-27.
Speakers portray funding solution prospects as mixed
Those who attended the PHIA Transportation Conference and Annual Meeting came away with a combination of good and bad news related to the likelihood of transportation funding solutions.
Sec. Schoch
PennDOT Secretary Barry Schoch said he remains optimistic that the General Assembly and administration will begin tackling the funding issue, perhaps as soon as May, and that he believes that whatever policymakers support, it will include the most important elements among the recommendations of the Transportation Funding Advisory Commission.
Schoch said he and Governor Corbett plan to meet with legislative leaders at the end of April to determine a course of action.
Sen. Jake Corman also delivered a pep talk, urging attendees to continue the push and keep the faith. Corman, who introduced legislation in the Senate that mirrored the TFAC recommendations, said he believes the Senate is ready to address the issue and has the votes to advance the issue.
Sen. Corman
Corman made an interesting point countering the notion that legislators will have a difficult time with gasoline hovering at $4 per gallon. He noted that the oil companies price their product by region based on what the markets will bear, and because of the current price may actually absorb a greater portion of any Oil Company Franchise Tax increase instead of passing it along to motorists.
Schoch and Corman both spoke of the “cost of doing nothing,” noting that Pennsylvanians can either pay to fix the problem, or pay to continue to have the problem. Congested roads, rough pavement and weight-restricted or closed bridges increase the cost of fuel and maintenance, as well as for products that move through the Commonwealth.
Rep. Shuster
As for a solution at the federal level, Congressman Bill Shuster’s keynote address was not as cheery. There is no appetite in Washington increase the federal fuel taxes, he said, nor is there enough support for expanded tolling at present.
Shuster said he has been tasked with “selling” the House Republican’s proposed five-year funding bill before the latest funding extension – the ninth since the most recent funding measure expired 2 ½ years ago – expires at the end of June.
PHIA wishes to thank the speakers, as well as attendees, for a successful event.
Anyone who has ideas or comments regarding the event is welcome to email Managing Director Jason Wagner at jwagner@PaHighwayInfo.org.
