PA Turnpike Transfers $337.5 Million to PennDOT
CEO underscores need to relieve Turnpike customers of funding burden.
The Pennsylvania Turnpike Commission (PTC) yesterday transferred $337.5 million to the Commonwealth of Pennsylvania to fulfill its legal obligation to provide supplemental transit funding for PennDOT under PA Act 44 of 2007. The wire transfer includes three quarterly payments of $112.5 million each as follows:
a payment from July 2020 that had been deferred because of COVID-19 related toll revenue losses;
a payment from October 2020 also deferred due to COVID-19 losses; and
a regularly scheduled quarterly Act 44 payment due this month.
With today’s payment, the PTC has provided the Commonwealth with $7.337 billion in Act 44 funding to date.
“Despite the many operational and economic challenges resulting from the COVID-19 pandemic, the Turnpike Commission today makes good on our mandate to fund transit agencies in Pennsylvania’s largest cities,” said PA Turnpike CEO Mark Compton. “Unfortunately, 15 years of state-mandated payments have fueled our rising debt and led to annual toll-rate increases that our customers have had to shoulder.
“In addition to cutting operating expenses to offset the effects of the pandemic, we’ve reduced our capital plan by $119 million over two years (FY21 and FY22) — a move which will have a significant impact on our own infrastructure projects for the next decade or more. Next year, 2022, is the last year for this significant funding obligation to PennDOT and we must ensure that is the end of this particular fiscal chapter for us.”
Under PA Act 89 of 2013, the PTC’s Act 44 obligation is scheduled to drop from $450 million to $50 million annually beginning July 1, 2022.
“The funding of transportation infrastructure and mass transit is a critical focus as our state’s new legislative term begins,” continued Compton. “We applaud the work of our regional mobility partnerships to address comprehensive solutions, and we look forward to working closely with Governor Tom Wolf and the members of the PA General Assembly to identify new, reliable sources of funds for transit operations and other opportunities to provide relief for our customers.”
The Act 44 funding plan requires the PTC to implement annual toll increases as its core funding mechanism. The PTC implemented its first Act-44 toll increase (25 percent) on Jan. 4, 2009. Since then, tolls have gone up for some travelers every January for 12 years. As a result, a 270-mile PA Turnpike trip from Pittsburgh to Valley Forge for E-ZPass users has jumped from $15.25 in 2008 to $31.40 in 2021.
Under Act 89, the PTC’s payments to the Commonwealth will be 100 percent cash funded starting next summer. But the PTC will nonetheless be compelled to continue to increase tolls annually to pay down outstanding Act 44 debt. In fact, the Commission projects it will require 5 percent toll increases annually from 2022-2025, then decreasing incrementally to get to 3 percent starting in 2028 through 2050.
Transportation providers including the PTC have been hit hard by the global pandemic. Since March 2020, the PTC saw a $270 million drop in revenue compared to the prior year. What’s more, it forecasts total COVID-19 revenue impacts to exceed $500 million through fiscal year 2023.