Wednesday, May 21, 2008

Want to buy a turnpike?

Pennsylvania 50.7 63.6
As evidence the state isn't lacking into the tax category, however when I drove truck rarely ever did I fuel in PA because of the fuel cost. It was far more efficient to consolidate under IFTA. The first column is tax on gas the second is tax on diesel per gallon pumped.

With estimates of highway's value varying from $2 billion to $30 billion, Rendell sets Dec. 22 as deadline for companies to submit plans to buy or lease it

Thursday, December 07, 2006

HARRISBURG -- Private companies and contractors who might want to buy or lease the Pennsylvania Turnpike will have to start crunching the numbers quickly.

Gov. Ed Rendell, who wants to know how much he can get for the nation's first superhighway, is giving interested parties until Dec. 22 to submit their proposals.

Mr. Rendell said yesterday that preliminary estimates of what the road is worth vary widely -- anywhere from $2 billion to $30 billion.

The sale or lease of the turnpike is one way the state may generate some of the $1.7 billion a year it needs to repair hundreds of state-owned roads and bridges and put mass transit systems on a firmer financial footing.

But tax increases of some sort -- gasoline tax, sales tax, personal income tax or realty transfer tax -- might also be needed, the governor cautioned.

"Pennsylvania has been enduring a transportation funding crisis with no feasible, comprehensive solution," Mr. Rendell said at a news conference held in Philadelphia with state Transportation Secretary Allen Biehler.

As a first step toward resolving the crisis, he's looking into a "public-private partnership" regarding the turnpike. He said Indiana and Illinois have sold roads or bridges to private operators, deals that could serve as models for Pennsylvania.

He admitted that Dec. 22 is an aggressive deadline for companies to meet. But he said the turnpike-sale concept has been aired publicly for several months and some interested firms have already started the evaluation process.

The turnpike sale idea was also proposed in a report last month by a transportation funding panel headed by Mr. Biehler.

Mr. Rendell wants to know how much he can get so he can prepare a transportation funding proposal for the General Assembly by late January.

If the state got, say, $10 billion for the turnpike, that money would be put into interest-bearing investments. At an 8 percent rate, he said, it would generate $800 million a year for transportation needs. But if the state got only $2 billion from the sale, it would earn only $160 million a year in interest, which "wouldn't scratch the surface of our funding problems," Mr. Rendell said.

The target of $1.7 billion a year is what Mr. Biehler's study panel estimated was necessary to bring state-owned highways, bridges and mass transit up to a safe, reliable status.

"Raising this amount of funding won't be easy," the governor said. If a turnpike sale raised $800 million a year in interest income, the state would still need an additional $900 million a year to fix the transportation problems. Some sort of tax or fee increase would likely be needed.

The Biehler panel report listed possibilities as a 12.5-cent per gallon increase in the gasoline tax, which is now 31 cents a gallon; higher vehicle registration fees; or increasing the 6 percent sales tax, the 3.07 percent personal income tax, or the realty transfer tax paid on home sales.

"We are looking at all options. Nothing is off the table," Mr. Rendell said. He didn't specify which taxes he might seek to increase. The only option he won't consider is "doing nothing."

If the turnpike is sold, the governor said there would be some protections for the toll takers and other turnpike employees, who might lose their jobs under a private takeover. But he didn't say exactly what the protections would be or how long they might last.

He also said motorists would be protected from excessive toll increases, such as by limiting future increases to an inflation rate.

Mr. Rendell hasn't said who might buy the road, but one interested company is Macquarie Infrastructure Group, based in Australia. It has already taken control of a toll road in Indiana for 75 years and the Chicago Skyway bridge for 99 years.

When the Legislature begins its new session next month, Rep. Rick Geist, R-Altoona, plans to introduce a bill to allow private ownership of state highways.

First published on December 7, 2006 at 12:00 am

No comments: