Keep the change: Toll highways aren’t going away

Peter Mills, acting executive director of the Maine Turnpike Authority, stands by a turnpike tollbooth in Portland recently.
Pat Wellenbach | AP
Peter Mills, acting executive director of the Maine Turnpike Authority, stands by a turnpike tollbooth in Portland recently.
By Matthew Stone, BDN Staff
Posted June 22, 2012, at 6:15 p.m.

AUGUSTA, Maine — Merging the Maine Turnpike Authority with the state Department of Transportation — and eliminating the 100-mile road’s tolls — has long been suggested as a way to better manage the state’s highway system and its costs.

It’s a suggestion the quasi-state agency is encountering again this month as it holds public hearings on its proposal to raise tolls in order to generate an additional $26 million in revenue annually.

Although the merger and toll elimination has come up periodically throughout the Maine Turnpike’s nearly 70-year history, it’s never gained enough traction to move forward because the finances didn’t work, according to two former state transportation commissioners.

And the math likely won’t add up in the future, given the turnpike authority’s $450 million debt load and shortfalls in state and federal highway funds that have reduced capacity to pay for major road projects.

“If you kept the tolls on, that’s one thing,” said Dana Connors, president of the Maine State Chamber of Commerce and transportation commissioner under Govs. Joseph Brennan and John McKernan in the 1980s and 1990s. “But if you took the tolls off, then it became the question of the Department [of Transportation] assuming 100 miles of highway, so how do you finance it?”

A ‘golden age’ for tolls

The Kittery-to-Portland stretch of the Maine Turnpike opened in 1947 as one of a number of northeastern highways that used what was then a new model for financing road construction: selling bonds that would be repaid by charging tolls.

It was the “golden age of tolling,” said Neil Gray, government relations director at the International Bridge, Tunnel and Turnpike Association. The bond-and-toll model let states like Maine and Pennsylvania build modern highways relatively quickly, he said, since construction didn’t depend on a government agency collecting full funding up front.

“The variation with the tolling authority is, they have full funding in hand right now,” Gray said. “Once you issue the bonds, you know when the payment is due. They build the thing. It’s in their interest to build the thing quickly.”

The first portion of the Maine Turnpike opened six years after Maine’s Legislature created the Maine Turnpike Authority and charged it with constructing a highway stretching from Kittery to Fort Kent. The Portland-to-Augusta extension started soon after the turnpike’s 1947 opening and was completed in 1955, according to a Maine Turnpike Authority history.

A permanent fixture

Tolls weren’t considered a permanent fixture on the turnpike throughout much of the road’s early history. Many expected the collections to stop once the Maine Turnpike Authority paid off its debt from the road’s construction.

“In the 1980s, we came to a point as a state where the bonds were able to be paid off, and you could see the light at the end of the tunnel,” said John Melrose, who served as transportation commissioner under Gov. Angus King and has spent much of his career in the transportation sector.

But then, Melrose said, state transportation officials took stock of some major improvements the turnpike would need, like repairs to aging bridges and a wider highway in more congested areas. Meanwhile, according to Melrose, the state’s highway fund was experiencing “ongoing financial dilemmas.”

So lawmakers in 1982 authorized the Maine Turnpike Authority to continue as an agency and to continue collecting tolls. And the authority had to divert some of its toll revenue to the state highway fund to pay for improvements to other roads.

Many toll-funded highways opened with promises from politicians that the tolls would stay only until the construction bonds were paid off, Gray said.

“The reason why the toll never goes away is because you never get away from the cost of maintaining or improving that facility,” he said.

A nontoll interstate system

In 1956, the year after the Portland-to-Augusta stretch of the Maine Turnpike opened, the Federal Aid Highway Act passed Congress, funding the creation of the interstate highway system. The federal government was to pay about 90 percent of construction costs and fund it largely through a gasoline tax rather than tolls.

That meant construction of toll roads came largely to a standstill in subsequent decades, said Gray, and the gas tax proved a steady revenue stream for a while.

It was during this period, between 1960 and 1986, that the remainder of Maine’s interstate highway network was built in various stages, all without tolls: I-295 connecting Portland to Gardiner, I-95 from Augusta to Houlton, I-195 between Saco and Old Orchard Beach, and I-395 connecting Bangor and Brewer.

What’s the future for toll roads?

But tolls appear to be regaining their momentum.

Over the last decade, the share of interstate highway miles with tolls has grown, according to data from the Federal Highway Administration. Between 2001 and 2010, the number of interstate highway miles with tolls grew nearly 10 percent, while the overall number of interstate highway miles grew by about 1 percent.

Some states that eliminated their tolls, like Connecticut and Kentucky, are debating whether to bring them back. And states including Ohio and North Carolina are increasingly looking to tolls as a way to fund major investments in their interstate highways.

It’s a matter of necessity, says Melrose. As cars become more fuel-efficient, state and federal governments can’t depend on the gas tax as a steady stream of revenue for their highway funds.

Plus, there’s little appetite for raising taxes. The federal government hasn’t raised the gas tax since 1993, and Maine legislators last year stopped indexing the state’s gas tax to inflation, meaning that tax will remain 30 cents per gallon indefinitely.

In 2010, the federal highway fund received a $14.7 billion bailout from the federal government’s general fund. And in Maine, the state had to transfer $11.3 million to its highway fund from other sources to make ends meet during fiscal years 2010 and 2011, according to the state’s Office of Fiscal and Program Review.

“It makes it difficult to have a straight-faced conversation about having the highway fund pick up the tolling costs,” Melrose said.

Another factor complicating the Maine Department of Transportation’s takeover of the Maine Turnpike Authority is the turnpike authority’s debt load. According to executive director Peter Mills, the authority’s current bond balance is almost $453 million, and the authority will need to pay nearly $200 million in debt service by 2017. Much of the debt is the result of a widening project completed in 2004 that added two lanes to the turnpike from Kittery to Scarborough.

“For the state of Maine to assume the responsibilities for the management of the Maine Turnpike Authority, it would be almost prohibitive because of the amount of debt,” said Sen. Ronald Collins, a Wells Republican and chairman of the Legislature’s Transportation Committee.

And while he isn’t convinced by the turnpike authority’s current proposal to raise tolls, Collins said, tolling is the right way to raise revenue for the Maine Turnpike.

“As far as tolling being a good method for generating revenue,” he said, “it’s the right thing to do from the standpoint that the users pay for it. It’s a user fee.”

http://bangordailynews.com/2012/06/22/politics/keep-the-change-toll-highways-arent-going-away/ printed on April 20, 2014