Tuesday, April 21, 2015

PennDOT to Turnpike: Pay $118 million or we're taking over

PennDOT invokes Act 44 and demands more money to fix state roads, bridges, transit

PennDOT to Turnpike: Pay $118 million or we're taking over

The Pennsylvania Department of Transportation has demanded that the Pennsylvania Turnpike Commission pay PennDOT $118 million by Sept. 18, or it will force the commission to require "a unanimous vote of all Commissioners" for any action it takes, which would have the effect of giving PennDOT secretary Allen D. Biehler, an appointee of Gov. Rendell's, veto power over the Turnpike's future decisions.

The letters were disclosed in a supplement, filed yesterday, to the Turnpike Commission's planned $273.5 million bond issue prospectus from last month.

According to the supplement, the turnpike made PennDOT a payment of $112.5 million last month for state road, bridge and transit work, as required by the state's Act 44 transporation subsidy law. But PennDOT, in letters Aug. 4 and Aug. 16, says the Turnpike owes another $118 million, under that same Act 44.

The Turnpike disputes PennDOT's interpretation, but tells potential bondholders that, under the Act 44 funding agreement, PennDOT says it will invoke its veto rights, and also seek additional, unspecified "remedies", if it doesn't get the money by the September 18 deadline.

Turnpike spokesman Carl DeFebo says the Commission doesn't believe it owes what PennDOT demands. PennDOT declined to comment.  UPDATE: Harrisburg Patriot-News says Gov. Rendell doesn't support PennDOT's action. Previous proposals to raise transportation funds by leasing the Turnpike to private owners (Rendell) or raising tolls on I-80 (the Turnpike's idea) have been shot down. So where's road, bridge, and transit-fixing money supposed to come from?

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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