PAtownhall.com
Pennsylvania's Marketplace of Ideas
Pennsylvania's Marketplace of Ideas
PAtownhall.com
Pennsylvania's Marketplace of Ideas
Pennsylvania's Marketplace of Ideas
by Policy Brief
SUSQUEHANNA VALLEY CENTER FOR PUBLIC POLICY www.susvalleypolicy.org
This report by Charles E. Greenawalt II, Ph.D., Senior Fellow, raises questions about Governor Rendell's intentions or any future proposals to sell or lease the Pennsylvania Turnpike.
The report indicates why the state should not sell or lease the Turnpike to any private entity. The reasons presented against placing the Pennsylvania Turnpike in a long-term lease arrangement are the following:
1) The American public sector has only been selling and engaging in long-term leases of public highways for about two years. Additional time for study of monetization is needed for after initial good reports about the Chicago Skyway and the Indiana Toll Road arrangements; more recent reports are being issued that call the wisdom of these agreements into question.
2) Money that is earned by the Turnpike should stay in public hands and not be sent to private sector investors as profit while denying the public the opportunity to benefit.
3) The safety, security, and service given to users of the Pennsylvania Turnpike is better than that of any other highways in the state. This was vividly illustrated last winter during the snowstorm in February 2007 that stranded thousands of motorists on I-78 for more than a day.
4) If Turnpike users are willing to pay higher tolls, the extra revenue generated should be dedicated to improving that roadway and the state's transportation infrastructure as opposed to being used as profits that are streamed away to private investors.
5) The responsibility of repairing and building new transportation infrastructure in Pennsylvania should not rest solely on the shoulders of Turnpike customers. Those who use other highways and bridges should also be asked to shoulder some of this burden and contribute to this effort.
Noting a 2007 poll conducted by Susquehanna Polling and Research which showed that Pennsylvanians of all political parties, ideologies, genders, and ages oppose a proposed sale or long-term lease of the Turnpike, the report notes that many questions regarding the proposed sale of the Turnpike needs to be answered. Among these questions are: What is the true value of this asset? Would the Commonwealth have a competent appraisal of the value of its asset? Would the Commonwealth obtain a fair price? Would the state proceed to invest this one-time financial windfall wisely in a manner that would ensure its citizens against any negative long-term repercussions?
Dr. Greenawalt notes that if the Turnpike is sold--toll increases will come quickly and will be relentless. He notes the example of the Chicago Skyway, which is a leased facility. This roadway will see tolls increase from $2 in 2005 to $5 in 2017. If applied to the Pennsylvania Turnpike during its 67 year history, the toll for driving the length of the east-west span from the New Jersey border to the Ohio border would have risen to $533 instead of the current $22.75.
He also reports that the quality of services could decline. "While one would expect to find the private vendors extending good quality services to consumers during the beginning portion of their lease/purchase, is it reasonable to expect that this situation will endure? New owners could sell or lease these facilities to other vendors with the possibility of mixed results. One such failure was the privatization of the Atlanta water system. The management of this water system was so shoddy that the city government needed to reclaim it."
Dr. Greenawalt also observes that it is possible that the Turnpike could come under the control of a foreign country due to the emergence of Sovereign Wealth Funds (SWF), which are capital funds controlled by specific nations that have begun to flex their monetary muscles in world financial markets. Among the countries that have huge investments in these SWFs are the United Arab Emirates, Saudi Arabia, and China.
The Susquehanna Valley Center's report also maintains that the Pennsylvania Turnpike Commission has always done what has been asked of it by lawmakers. The Turnpike Commission was established to arrange for the financing, building, expansion, and maintenance of the roadway. It has been asked to be largely self-sufficient, and it has accomplished that goal along with all of the other ones that have been set for it. The report notes that before the Governor calls for the dismantling of an organization that has served the Commonwealth well over many years and accomplished everything we have asked of it, should we not give that organization an opportunity to achieve whatever our new goals are for state transportation?
Finally, this research shows how well the Turnpike has performed in comparison to other similar roadways in the United States. It also reminds readers that applying tolls to portions of Pennsylvania's interstates--such as Interstate 80--will allow these highways to become self- sufficient. This will allow the Commonwealth to use the transportation money that it would have used on maintaining these roads on other state roads, bridges, and mass transit.
Complete report is available at www.susvalleypolicy.org.
