U.S. rejects Pa.'s request for I-80 tolls

The Federal Highway Administration yesterday rejected Pennsylvania's application to install tolls on I-80, blocking a key part of the state's plan to fund highways, bridges and mass transit.

Gov. Rendell immediately urged the state legislature to fill the gap by approving his plan to lease the Pennsylvania Turnpike for $12.8 billion to a Spanish-U.S. consortium.

Several leading state lawmakers said they doubted the turnpike lease would gain enough support to pass in the election-shortened session of the legislature.

The federal highway agency said yesterday the state's application did not meet requirements that the tolls from I-80 be used for "legitimate and valid operating costs" of that highway.

The FHWA said in its decision memo that the payments generated by I-80 tolls "appear to have been predetermined by the Pennsylvania General Assembly based on considerations largely unrelated to the true costs" of operating and maintaining I-80.

"When you talk about funding those other needs, the federal statute doesn't permit that," said Jim Ray, deputy administrator of the FHWA.

Without toll money from I-80, SEPTA and other mass-transit agencies stand to get $150 million a year less than anticipated, and highways and bridges will get $300 million a year less - a cut of 50 percent by 2010.

Tolling I-80, the 311-mile interstate across northern Pennsylvania, was a core provision of a transportation funding law, Act 44, enacted by the legislature last year.

Joseph Brimmeier, chief executive of the turnpike commission, said yesterday "the turnpike will continue to meet our financial obligations under Act 44. We provided $750 million to the commonwealth last fiscal year, are providing $850 million this year, and plan to meet the FY2010 commitment to make payments totaling $900 million to PennDot for roads, bridges and public transportation agencies across Pennsylvania."

The turnpike commission is making those payments by borrowing money that was to be repaid from I-80 tolls and higher tolls on the turnpike.

The federal rejection of the tolling plan "is very detrimental to our efforts to maintain our highways and bridges," said State Rep. Joseph Markosek (D., Allegheny), chairman of the House Transportation Committee and a leading supporter of tolls on I-80.

Markosek said he would continue to oppose Rendell's efforts to lease the turnpike because "I'm convinced that bid is $15 billion too low."

"It's not politically safe to give up control of the turnpike for 75 years for such a low bid," Markosek said.

But Rep. Dwight Evans (D., Phila.), the appropriations committee chairman and the sponsor of the bill to lease the turnpike, said the state has few other alternatives to raise $1 billion a year in additional transportation funding.

"Do you want to be talking about raising taxes on gas in this climate?" Evans said. "We should have a vote on the lease."

A consortium formed by Abertis Infraestructuras S.A. of Barcelona, Spain, and Citi Infrastructure Investors of New York, has offered to pay the state $12.8 billion for the right to operate the turnpike for 75 years. Rendell has estimated that payment could be invested to generate about $1 billion a year for transportation projects.

Rendell urged the legislature to approve the lease in the short time remaining in the session. He said that the offer won't be around after this year and that the legislature shouldn't "play Russian roulette" by waiting for a better offer.

But he said he would sign any bill approved by the legislature that provided the $1 billion a year for transportation, lease or no lease.

"We've got to deal with this and deal with it now," Rendell said.

The defeat of tolling on I-80 was applauded by trucking groups, congressmen from northern Pennsylvania, and the consortium seeking to lease the turnpike.

"This is yet another unfulfilled promise of the Turnpike Commission, which has spent months urging legislators to make policy decisions on a bet they have now lost," said Jim Courtovich, an adviser to the Abertis-Citi consortium. "The lease has always been a better solution for the commonwealth, with or without the tolling of I-80. It is the only option that brings new investment into the state - more than $21 billion."

The Bush administration has been outspoken in calling for creative new ways to finance transportation projects, as federal funds wane.

"We commend Pennsylvania for thinking creatively in trying to find a solution to its transportation needs," the FHWA said in its memo rejecting the I-80 tolls. "Although we are unable to move the application forward, the FHWA stands ready to assist the commonwealth in finding other creative ways to fill the gap."