Pennsylvania Turnpike Fast Facts for April 22, 2008:
The Yellow Brick Road Really is Gold
LEASING THE TURNPIKE ONLY ADDRESSES SHORT-TERM MAINTENANCE ISSUES
By leasing or selling public transportation infrastructure, local and/or state governments are addressing short-term maintenance problems. Since much of America's public transportation infrastructure was built between the 1930s and the 1950s, the demands upon government to patch potholes and replace aging steel girders in bridges, for example, are daunting. In 2007, an estimated $155.5 billion was needed nationwide by federal, state, and local governments to maintain our highways and bridges. The estimated costs for transportation infrastructure maintenance, therefore, have risen by 50 percent in the last ten years. These needs have been occurring during a time when governments also find it extremely difficult to raise taxes.
While the advantages of selling or leasing public transportation infrastructure for the public sector can be seen in cash infusions, the disadvantages of this approach can be seen in the cost of the provided services; the long-term maintenance of these facilities; the quality of services; the inevitable onset of innovative pricing or service arrangements to extract larger amounts of cash from private users of these facilities; and the distribution of benefits from this activity among our general public. The last disadvantage spotlights the fact that this form of privatization greatly benefits a small circle of private investors while the remainder of society struggles to pay ever-increasing tolls for access to highways of ever-decreasing quality. Is this type of arrangement truly promoting the public interest?
Toll increases are likely to come quickly and will be relentless. One example of a leased facility is the Chicago Skyway, and this roadway will see tolls increase from two dollars in 2005 to five dollars 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 $553 instead of the current $22.75.
The quality of service is also enumerated above as a possible disadvantage of privatization. While one would expect to find the private vendors extending good quality services to consumers during the beginning portions 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. Our experiences with service quality for privatized toll roads is already varied, and other privatization projects have fared poorly. 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.