(The Center Square) – The Pennsylvania Turnpike system could face challenging financial headwinds ahead as it grapples with lost revenue from COVID-19 and continued debt-related obligations. Independent organizations are beginning to weigh in on the confluence of circumstances at play.
The state Turnpike Commission has yet to officially report on official traffic or financial data since the pandemic first struck and lockdowns became commonplace.
But Frank Gamrat, executive director of the Allegheny Institute for Public Policy, said he estimates the Turnpike bringing in $171.91 million less in anticipated revenue from mid-March through the end of June.
“The losses are predicated on a shutdown lasting … through June,” Gamrat wrote in a recent policy brief. “If the state enters the ‘green phase’ sooner and people have the confidence to travel again, then the estimated losses could be lower.”
Gamrat’s number crunching took into account passenger and commercial vehicles. Lost revenue from passenger vehicles, according to Gamrat’s estimates could reach $128.41 million by the end of the month, while commercial vehicle revenue losses have been pegged in his analysis at $43.5 million.
Against the backdrop of the reality of COVID-19 are the Turnpike’s debt obligations. Commissioners in May requested postponement of a looming $112.5 million payment to the Pennsylvania Department of Transportation due to anticipated revenue declines.
While residents and out-of-state travelers only pay tolls to the Turnpike in select areas of Pennsylvania, the proceeds are spread across various areas.
“Toll revenue from the Turnpike is used not only for the state Turnpike Commission’s expenses, but is also being used to fund mass transit across the state,” Gamrat wrote. “The commission has been borrowing huge amounts of money against toll revenues to meet the legislatively mandated payments to the PA Department of Transportation.”
In recent years, Turnpike officials have been making annual payments to PennDOT to the tune of $450 million. The bulk – $400 million – has been fortifying mass transit, while the balance has gone toward a multimodal transportation fund.
For their part, Turnpike officials have begun addressing the anticipated losses by tackling the expense side of the ledger.
As the financial fallout from COVID-19 takes form, officials on June 2 announced the layoff of 500 employees who worked primarily as toll collectors and fare-collection personnel.
“I deeply regret that we have reached this point, but the world has been irrevocably changed by the global pandemic,” said Mark Compton, CEO of the Pennsylvania Turnpike Commission. “This pandemic had a much greater impact than anyone could have foreseen. The PA Turnpike has not been spared from COVID-19.”
Pennsylvania officials have struggled to keep pace with funding infrastructure in recent years. A pre-pandemic House Appropriations Committee meeting in February demonstrated some of lawmakers’ varied viewpoints in addressing the state’s needs through programs and other efforts.
“You can be against Restore Pennsylvania, you can deny climate challenges that come with that, but if you don’t want a severance tax and you don’t want Restore PA, then how are you planning on funding this? Committee Minority Chairman Rep. Matt Bradford, D-Montgomery, said at the meeting.
At the same meeting, Majority Chairman Rep. Stan Saylor, R-York, shot back, saying, “There’s a difference between real solutions and pie-in-the-sky solutions. We need a real solution.”
In the long and winding road ahead, Gamrat in his policy brief is again calling on state officials to take a sweeping look at how mass transit is funded in the state.
“The pandemic has dramatically exposed the ill-conceived reliance on toll revenues to fund mass transit,” Gamrat wrote. “The estimated loss … will hurt the Turnpike Commission’s ability to make payments on current mainline debt.”