By Melissa Daniels | PA Independent
HARRISBURG — As the economy continues creeping along in the slow lane, drivers will probably decide against paying the toll.
As a consequence, and somewhat ironically, toll roads and bridges – like those here in Pennsylvania – may become even more expensive for travelers in an effort to pay down billions in debt.
A new report from Moody’s Investor Services concluded toll road numbers in 2012, on the whole, looked similar to those in 2011. But that could change, Moody’s warns, as toll road agencies add debt.
Debt per road mile increased to $18.9 million in fiscal 2012, from $14.3 million in 2011, the report found.
“Steady toll rate increases will be necessary to support a growing debt burden,” explained Moody’s, “although the unfettered ability to increase toll rates could face mounting political pressure in an economy that is growing slowly.”
Moody’s said modest growth in toll road and bridge use was enough to offset growth in debt in 2012. But for the rest of 2013, the outlook for toll roads remains negative.
Moody’s expect that “rising toll rates … a sluggish economic recovery,” and potential rising fuel prices will keep traffic volumes somewhat flat, “particularly if gas at the pumps rises above $4 a gallon for per protracted period.”
The report examined 42 tolling agencies throughout the United States, including the Pennsylvania Turnpike Commission, the Delaware River Port Authority and the Delaware River Joint Toll Bridge Coalition.
Timothy Ireland, director of corporate communications at DRPA, said the agency predicts about half a percent of annual growth in traffic and toll revenue for the foreseeable future.
But, Ireland said, DRPA doesn’t have the same concerns as other toll agencies that might see travelers take different routes. The four bridges DRPA controls – the Ben Franklin, the Betsy Ross, the Walt Whitman and the Comm. Barry bridges – are the only vehicle options to get from Philadelphia to South Jersey.
As far as debt goes, DRPA is improving its picture. The agency used to borrow money to put toward economic development projects on the shores of the Delaware River, a policy decided by both Pennsylvania and New Jersey. But, as of 2010, that practice was discontinued, Ireland said.
“We’re actually a little relieved,” Ireland said. “We had a burden removed from us.”
Tolls on DRPA bridges are $5 a pop for passenger vehicles – and it looks like they’ll stay there for a while.
“We’re not planning a toll increase for the foreseeable future because our last toll increase was really large enough to create enough of a revenue stream to support our debt and debt service for quite some time,” Ireland said.
The Pennsylvania Turnpike Commission is another story. It’s 540-mile stretch of roads and bridges across Pennsylvania is a different type of infrastructure in regard to maintenance, meaning debt obligations for capital improvements are issued on a different basis. But more than upgrades, a major trigger for toll increases is the Turnpike’s annual $450 million debt obligation to the Pennsylvania Department of Transportation, passed as part of Act 44 of 2007.
The turnpike has increased tolls every year since the act passed in 2007, making the increase scheduled for January 2014 the sixth consecutive toll increase and the 11th in the agency’s 73-year history.
Whether the commission sees an end to Act 44, and thus its continuing debt obligations, may depend on whether the General Assembly passes increased transportation funding this fall.
Nevertheless, Moody’s predicted more of the nation’s highways will become toll roads.
“The user-pay model for funding transportation projects is gaining acceptance as traditional tax-supported funding options for infrastructure fall short of needs,” read a statement from Maria Matesanz, a senior vice president who authored the report.
Contact Melissa Daniels at [email protected]