Common sense seems to be a commodity that mankind always strives to inject into government and politics. Certainly, common sense is frequently missing in the day-to-day operations of our federal and state governments. The study of public administration is replete with examples of management tools and techniques that are little more than the application of common sense.
Common sense was lacking from the very beginning of the examination of the Turnpike Commission and its operations during this recent controversy over the privatization of the roadway. Advocates of privatization or a sale of the roadway constantly bemoaned the costs of the Turnpike or its rate of return.
All of Pennsylvania should be clear about one point: The Turnpike Commission has simply and always done what we have asked of it. 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.
In fact, the Turnpike Commission has done an exemplary job of operating and maintaining its roadways. This point is clearly illustrated by evaluations of the Turnpike that have been made by Moody's Investors Service and Fitch Ratings. Moody's publicly published reports reveal that the Turnpike's operating expenses per roadway mile are significantly lower than the median for similar turnpikes. Fitch Ratings, on the other hand, report that the Pennsylvania Turnpike has operating expenses that are 18 percent lower than the median for similar turnpikes.
As these reports are examined in greater detail, one finds that Moody's Investors Service ascertained on 1 May 2007 that the Pennsylvania Turnpike has the lowest operations, maintenance, and administrative expenses per roadway mile of any comparable turnpike examined by Moody's. In fact, the operating expenses of the Pennsylvania Turnpike per roadway mile are 9.5 percent lower than the median for its comparable group of Turnpikes. Our neighbors, Maryland and New Jersey, have total turnpike expenses per mile that are more than three times that of the Commission. Moody's also tells us that the Pennsylvania Turnpike has total expenses per mile that are only one-third of the roadways operated by the Maryland Transportation Authority and the New Jersey Turnpike Authority. The 1 May 2007 Municipal Financial Ratio Analysis produced by Moody's Investor Service also showed the existing quality of service on the Pennsylvania Turnpike in a few other indices. The Commission has the lowest debt per roadway mile in comparison to similar roadways, and the Commission's five-year growth rates for toll revenue and total transactions are well above the median when compared to other comparable roadway systems, such as the ones found in Florida, Illinois, Maryland, New Jersey, New York, and Ohio. Finally, when examining all of these turnpike systems, one also discovers that the Pennsylvania Turnpike Commission only uses 38 percent of its gross revenue to fund operating expenses, while the median for these systems is 42.7 percent.
Fitch Ratings' 2006 Credit Report for the Commission completed on 1 June 2006 compared the Pennsylvania Turnpike to a number of road agencies and other turnpikes such as Florida, Ohio, Oklahoma, Massachusetts, Miami-Dade County Expressway Authority, and New Hampshire. This report uncovered that Pennsylvania's Turnpike has the lowest debt service per lane-mile. Our Turnpike also showed similar operating expenses per lane-mile as the other roadways and significantly lower operating expenses per-lane mile than the Florida and Massachusetts Turnpikes. According to Fitch Ratings, the Turnpike has achieved a solid financial performance. It shows a net income (the operating surplus after paying for operating costs and debt service on the toll revenue bonds) ranging between 31 percent in 2001 to 47 percent in 2005.
For a complete analysis of the possible sale of the Pennsylvania Turnpike, visit www.susvalleypolicy.org.