Forced to Pay To Fund Things Other Than Itself, Pennsylvania Turnpike Drowns In Debt, A Symptom of the Times

Courtesy of Lee Adler of the Wall Street Examiner

The Pennsylvania Turnpike is a nice highway that crosses the state from New Jersey to Ohio, brushing by Philly and Pittsburgh on the way. When it opened in 1940 it was the first limited access toll highway in the US and the nation’s first and longest intercity limited access highway. It was known for its long tunnels that cut through the mountains of Western Pennsylvania.

I grew up in the 1950s about a mile and a half from the Fort Washington Interchange around the time the eastern portion of the highway opened.I remember my father telling me, when we were on on our long trips to New York and Connecticut where my cousins lived, that the highway was modeled after the world famous German Autobahn. I would ask Dad if the Pennsylvania Turnpike was better and more famous than the New Jersey Turnpike, which had more lanes, and seemed to me as a 7 year old to have a lot more traffic. It was very important to me that the Pennsylvania Turnpike was, in fact, better.  He assured me that indeed it was. It was the best and most famous highway in America. And that was that. Dad’s word was plenty good enough.

So even today, 54 years later, I still have an emotional connection to that highway. On my road trips between my homes in Florida and Quebec, I’ll frequently drive 30 miles out of my way to drive the 20 mile stretch of the Turnpike from the Plymouth Meeting Interchange to the Philadelphia Interchange.

Pennsylvania Turnpike Dark At the End of the TunnelIt’s that connection that caused me to note this story about the Turnpike, because it tells so much about the progression of America, and about who we once were and what we have become. We were a nation of dreamers and builders and doers. And we paid for what we dreamt of and built, and we made it work. Today we are a nation of debtors, borrowing to fund current consumption (and current destruction), while sticking our kids and generations to come with the bills. We have become a nation that refuses to pay for what we dreamed of and decided we wanted, whether it be to fund the most massive military machine the world has ever seen, or the promise to care for our elderly, which either is, or will be, us.

For many years the Pennsylvania Turnpike was a cash cow. Traffic grew. Tolls were raised and drivers kept coming. The State invested the money the road made in improving it.  Running the “world famous” Pennsylvania Turnpike was seemingly something that the government could do very well. The road made money for the State, and its customers were happy to use it and pay the tolls. Its revenues grew from $545 million in 2005 to $781 million in fiscal year 2012, ended in May, in spite of the severe recession of 2008 and 2009. The highway’s operating expenses are about $300 million a year. Until 2007, after debt service there was still an annual cash surplus.

But in 2007, the State Legislature, in its infinite wisdom, passed a law that said the venerable Turnpike would be required to provide funding for highways and transit systems throughout the state. Other constituents wanted these highways and transit systems, but wouldn’t, or in some cases couldn’t, pay for  them.  So they raided the Pa. Turnpike piggy bank. As a result, since 2007 the Turnpike has had to shell out $450 million a year to other State and Municipal Agencies to help pay for the things they wanted. In the process the Turnpike has piled up massive debt, leading Moody’s to assign a negative outlook to the Pennsylvania Turnpike Commission’s debt. Sadly, it seems that the Pennsylvania Legislature couldn’t help itself. It had to take something that worked and screw it up.  The Pennsylvania Turnpike has become just another symptom of what ails us, a society that somehow has learned to always want something for nothing, then steal the cost from our descendants.

The Philadelphia Inquirer covers the details.

The Pennsylvania Turnpike may be on the road to the poorhouse.

Required by a 2007 state law to provide billions of dollars for statewide road and bridge repairs and transit operations, the turnpike is spending more money each year than it makes, despite toll increases that have doubled the cost to travel the turnpike over the last 10 years.

To meet the financial demands created by the law, Act 44, turnpike officials have borrowed aggressively, leaving the agency deeper in debt each year.

The Turnpike Commission is now more than $7 billion in debt, up from $2 billion in 2002 and $4 billion in 2009. The burden continues to grow, with the turnpike required to make payments until 2057.

more via Pa. Turnpike $7 billion in the red.

Get regular updates the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Click this link to try WSE's Professional Edition risk free for 30 days!

Copyright © 2012 The Wall Street Examiner. All Rights Reserved. The above may be reposted with attribution and a prominent link to the Wall Street Examiner.

Did you like this? Share it:

Speak Your Mind

%d bloggers like this: