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Tuesday, October 18, 2011

Moody's: Hike PA turnpike tolls or we'll cut rating

"Larger than currently forecasted toll rate increases" may be needed "to maintain sound financial operations and targeted debt service coverage levels" on the Pennsylvania Turnpike system, warns Moody's Investor Service in a report today.

Moody's is also worried Turnpike tolls could be diverted "to pay for more of the state's growing unfunded infrastructure" unless Gov. Tom Corbett or the General Assembly comes up with some new funding scheme. Moody's set an A3 rating and "negative outlook" for the turnpike commission's $126.5 million Series B of 2011 subordinate lien bonds. The senior lien is rated Aa3, also with a newly negative outlook.

To address the state's unfunded, fast-failing repair jobs, Corbett has declared himself for "Public-Private Partnerships" and set up a committee including Liberty Property Trust chief Bill Hankowsky, Chester County banker Jim McErlane, and other prominent business people to find ways to get private investors to fund improved bridges, roads, rails and other public projects.

Such schemes typically cost more than cheap public funding, but have the virtue, for politicians, of being paid by users as higher tolls, not by all voters as higher taxes.
Posted by Joseph N. DiStefano @ 2:38 PM  Permalink | 13 comments
Comments   
  • 0 like this / 0 don't   •   Posted 3:32 PM, 10/18/2011
    That is what happens when you have a scheme for a public/private partnership to solve an infrastructure problem that is growing up fast on us. You involve Moodys and their negative ratings. Thus, the only way to pay for infrastructure upgrades is not user fees, but taxes on personal income plus increase in registration fees,gas taxes. Thus, money will be scored to pay for the much needed improvements. Anybody who tells you otherwise or tells you they won't raise taxes has the Brooklyn bridge to sell you. The other alternative is to do nothing and watch the turnpike be closed off to all traffic and people will do the pony express on local roads to get to their destinations.
    — James
  • 0 like this / 0 don't   •   Posted 3:32 PM, 10/18/2011
    Easy solution...STOP USING TURNPIKE. BTW, all the credit ratings agencies are own by bankers, wonder if "Occupiers" will protest them too?
    — Citizenc92
  • 0 like this / 0 don't   •   Posted 4:05 PM, 10/18/2011
    The whole problem started when the legislature enacted Act 44 back in 2007. That bill required the Turnpike to raise tolls annually and give the money to PennDOT to spread around the state. It also sought to establish tolls on I-80 that would also give money to PennDOT to spread around the state. When the feds rejected the I-80 tolling plan, the southern half of the state got stuck with the bill. So now we in SE PA get to pay more in tolls each year to fund projects in Lycoming County, while the rural rubes up north get to drive their I-80 for free.
    — everydayguy
  • 0 like this / 0 don't   •   Posted 4:16 PM, 10/18/2011
    "rural rubes"... funny.
    — tdoc
  • 0 like this / 0 don't   •   Posted 4:25 PM, 10/18/2011
    Just ask SEPTA for some of the money back that they have been sucking out of the PennDot account for the last ??? years.
    — superturtle
  • 0 like this / 0 don't   •   Posted 4:43 PM, 10/18/2011
    ridiculous... philly to pittsburgh cost $18 5 years ago, now its $28
    — raynesrock
  • 0 like this / 0 don't   •   Posted 5:17 PM, 10/18/2011
    This is because 80% of your toll goes to pay unionized toll booth workers some of which make six figures and huge pensions. What a scam that is. Do a story on that Inky.
    — Freddy
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  • 0 like this / 0 don't   •   Posted 5:34 PM, 10/18/2011
    Just like the DRPA funding soccer fields, ball fields and other nonsense with toll payers' money, I'm sure that a lot of the income accrued by the PA Turnpike Commission has been spent on their own frivolous pet projects.
    — RufusG
  • 0 like this / 0 don't   •   Posted 9:38 PM, 10/18/2011
    We own the turnpike. Let's make the commission lower the rates just to stick it to the rating agencies. They are working for rich bond holders.
    — Philly Born
  • 0 like this / 0 don't   •   Posted 9:02 AM, 10/19/2011
    Yup, we own the turnpike,unfortunately we borrowed money to maintain it.The monthly payments on our debt is killing us.I hope the Chinese keep their money invested in our Turnpike. Hate to have to sell the Turnpike for a loss. And walk to Pittsburgh.We are going to lose lots of opportunities to rebuild our Country if we keep spending money we have to borrow.Perhaps we can sell the Chinese some of our farmland.We could confiscate it from the BIG CORPORATE EVIL AGRIBUSINESS, that could buy us some time.
    — korvinsnerf
  • 0 like this / 0 don't   •   Posted 1:35 PM, 10/19/2011
    Gee, what happened to Governor Corbett’s Transportation Funding Advisory Commission (TFAC) ??? (http://www.tfac.pa.gov/)
    — avigilantone


13 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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