HARRISBURG, PA. (WTXF) -- The Pennsylvania Turnpike Commission approved a six percent toll increase for both E-ZPass and cash customers on Monday. The increase is set to take effect at 12:01 a.m. on Jan. 8, 2017.
PTC Chairman Sean Logan said this toll increase -- like other annual increases since 2009 -- is necessary to pay back the borrowing required to meet the PTC's funding obligations: rebuilding and widening the PA Turnpike system and providing funding to the commonwealth to support public transportation.
"Last fall, the PA Turnpike observed our 75th anniversary; while that is a great accolade, it means that parts of our system have outlived their design life and are in dire need of replacement," Chairman Logan said. "Revenues from this increase will fund a newly approved, 10-year spending plan which invests more than $5.77 billion in our system in the coming decade -- a large part of which will support ongoing total reconstruction and widening projects."
Revenues from the 2017 increase will also allow the PTC to fund its annual requirement to support off-Turnpike ground-transportation enhancements. Since 2007, the PTC has been providing supplemental funding to the commonwealth that is invested by PennDOT into non-tolled highways and public-transportation providers. Starting in Fiscal Year 2015, PTC payments have funded transit exclusively.
Commissioners today also ordered a system-wide reassessment of all Turnpike improvement projects in both the design and construction phases to confirm that the best decisions are being made on capital expenditures.
"I have directed executive staff to perform a comprehensive reevaluation of all highway and bridge projects, including those now under way, to ensure we are focusing on projects that are the most relevant to our strategic objectives," Chairman Logan explained. "Every project will be analyzed as part of this review. No project will be exempt."
Logan added that the commission has been pondering such a measure for some time.
"We are obliged to reassess capital spending today because of concerns that more than half of our revenues go to pay down our debt service each year," he said. "Toll revenues are forecast to reach $1.1 billion in Fiscal Year 2017, while debt service is $573 million. And that debt service obligation will grow as long as we are required to continue borrowing."
Logan said the project review is intended to fortify the commission's financial position.
"Without guarantees from the general assembly that relief is on its way, this is the most judicious step for the commission's economic viability," Logan said. "We simply cannot continue to burden customers each year because of the obligation the general assembly has imposed upon the Turnpike Commission and our customers."
The PTC continues to focus on cost-cutting measures to mitigate future increases. For instance, it implemented a strategic plan with renewed emphasis on controlling operating-expense growth; it has held the line on operating costs; and it has reduced headcount by eight percent in the last decade -- and by 20 percent in the fare-collection department in the same timeframe due to E-ZPass usage. Logan today asked executive staff to evaluate the need for a hiring freeze during the current fiscal year.
"While we will continue to mitigate toll increases through boosted efficiencies, we have no option but to increase tolls annually moving ahead," said Turnpike CEO Mark Compton. "Right now, traffic and revenue predictions estimate increases of up to six percent per year will be necessary until 2044."
During the last nine years, the PTC has provided $5.2 billion to PennDOT, of which $2.25 billion has supported highways while $2.95 billion has supported transit.
As a result of a transportation law enacted in 2013, the PTC's funding obligation to PennDOT will drop from $450 million a year to $50 million a year beginning in Fiscal Year 2023.
"While this measure provides some relief, it does not wipe out the Turnpike's debt or requirement to help fund PennDOT; we are still obligated to make further payments through 2057 totaling approximately $5 billion," Compton said. "Therefore, the Commission is bound to increase tolls each year."
As a result of today's measure, the most common toll for a passenger vehicle will increase next year from $1.16 to $1.23 for E-ZPass customers and from $1.80 to $1.95 for cash customers. The most common toll for a Class-5 vehicle -- a prevalent tractor-trailer class -- will increase from $9.59 to $10.17 for E-ZPass and from $13.60 to $14.45 for cash.
Toll rates will not increase next year on the Turnpike's Delaware River Bridge cashless tolling point northeast of Philadelphia. Tolls at that location will remain at 2016 rates.
While the 2017 increase equally affects cash and E-ZPass rates, PA Turnpike customers will continue to save time and money with E-ZPass. Today, more than 77 percent of transactions on the 552-mile PA
Turnpike are paid via E-ZPass. The PA Turnpike manages 1.7 million E-ZPass accounts with 2.7 million PTC-issued transponders in circulation.