Pa. Turnpike Chief Responds to Auditor General Wagner’s Claims of Financial Chaos

January 6, 2012

Contact: Carl DeFebo
Public and Media Relations Manager

Pa. Turnpike Chief Responds to Auditor General Wagner’s Claims of Financial Chaos

Statement from Pa. Turnpike Commission CEO Roger Nutt:

The Pennsylvania Turnpike Commission (PTC) is not facing any immediate financial crisis as the Auditor General states. The nation’s major rating agencies have not changed their underlying ratings of Pa. Turnpike bonds for more than three years. During that period, the Turnpike has provided more than $3 billion to the commonwealth for statewide investment in transportation systems. Furthermore, the continued existence of the Turnpike Commission is not in jeopardy, as he alleges, because the PTC has developed a sound, fiscally responsible approach to meet all of its financial obligations, including the $450 million annual payments to PennDOT under Act 44. Last June, the PTC approved a funding plan for all of its financial obligations for the next three years.

Auditor General Wagner’s assertion that the commission is in a financial crisis today is simply not true. To the contrary, the Turnpike Commission remains in a healthy financial position because it has taken the steps necessary to ensure its financial stability. The commission — at the same time it adopted its financial plan last summer — included an expanded capital plan to continue to enhance the highways and bridges under its jurisdiction.

Since the first Act 44-necessitated toll increase on the Pa. Turnpike in 2009, we have made it clear to our customers, to elected officials and to citizens of the commonwealth that annual rate hikes are needed to fund the Act 44 debt, as witnessed by wide coverage of that topic in the media over the past few weeks. We have been clear in public statements that the increases will be implemented annually to cover the debt-service cost of the payments to PennDOT.

We agree with the Auditor General that Act 44 funding may have a negative effect on Turnpike traffic, toll rates, customer service and other traveler benefits sometime in the future. We certainly understand that, in the long-term, the funding stream (toll increases) necessary to do so may not easily be sustained, and so subsequent amendments to the funding requirements may need to be considered. However, the PTC remains committed to meeting all its financial obligations — including obligations to bondholders — by sound management of our debt load and by reinvesting in our toll-road system.

To ensure that the commonwealth can continue to provide travelers with adequate transportation infrastructure, easing the Act 44 debt load of the Turnpike Commission is an issue that can only be resolved in a thoughtful, practical manner. The payments we make have become an integral part of the overall funding package needed to keep our state’s roads, bridges and transit systems functioning sufficiently on a daily basis. We also understand that to replace Act 44 payments will necessitate a thorough analysis of available, and attainable, funding alternatives.

We look forward to any opportunity to work with the governor and state legislature to ensure the long-term financial stability of the Turnpike Commission while understanding that, at the same time, there must also be adequate funding to ensure the safe operation of the state’s entire transportation network. As we have over the past 70 years of our existence, this agency stands ready to continue its role as a major funding and transportation partner to the commonwealth.

— Pa. Turnpike Commission CEO Roger Nutt

[back to News Releases]