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LETTER TO THE EDITOR |
FOR IMMEDIATE RELEASE |
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State
Rep. Joseph Markosek |
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Nov. 19, 2008
To the editor:
As chairman of the House Transportation Committee, I strongly disagree with the Williamsport Sun Gazette's Wednesday, Nov. 19 editorial, "Too good for leasing, turnpike now struggles." Had the legislature approved the proposed turnpike lease, there is no guarantee the turnpike would have weathered the current economic storm with the same fortitude it has benefited from under the Turnpike Commission.
Under Act 44, the Turnpike Commission has already paid to the Pennsylvania Department of Transportation $1.175 billion under the terms of the Interstate 80 lease agreement. The most recent quarterly lease payment of $212.5 million was made on Oct. 30. A total payment of $850 million is scheduled for fiscal year 2009 and $900 million for fiscal year 2010, whether or not I-80 is tolled.
In a time of incredible market turbulence, the Turnpike Commission successfully sold $411 million of bonds in mid-October. Moody’s Investors Service and Standard and Poor's affirmed the turnpike’s bond ratings at "Aa3" and "A+" respectively. While there were some significant obstacles to issuers accessing the capital markets in the worst credit market conditions since the Depression, investors strongly supported the commission’s financing, attesting the confidence they have in the agency.
Like every other enterprise, the commission has been negatively impacted by the recent economic crisis. In response, it will be implementing several cost-cutting measures. One of these measures is a Voluntary Departure Program, which will provide economic incentives to employees interested in leaving the commission’s employment. Watching its bottom line and making an early determination to cut costs is a step in the responsible direction.
The private sector is not immune to these harsh economic times. Abertis Infrastructuras asked the General Assembly to accept its bid of $12.8 billion to lease the turnpike on May 20. Since that date, the Standard & Poor’s 500 has declined by 33 percent as of mid-October. Had we accepted the Abertis bid, the taxpayers of Pennsylvania would have lost $3.3 billion over the past five months — over a third of the net available proceeds from the turnpike lease.
Even if the market recovered tomorrow and could be depended on to pay 8 percent returns going forward to meet the governor’s proposed funding plan, the 75-year infrastructure piggy bank would have been depleted in under 10 years. I can’t say it any better than Mr. Grata when he writes "lawmakers would have looked like fools; transportation’s long-range funding problem would be far from solved."
The Commonwealth is not alone in its need for rebuilding our highways and bridges. We must also remain mindful of the transition to a new presidential administration in Washington, D.C., the rapid decline of the nation’s infrastructure, and the reauthorization of a federal transportation policy. As chairman, I remain focused and eager to reach a consensus on transportation funding with my colleagues that will build upon the strong foundation of Act 44.
Pennsylvania should not relinquish control of a strategic asset to reform it - let’s keep the asset accountable to its customers, the taxpayers, and correct the inefficiencies. The Turnpike Commission has made tough decisions, but shown necessary foresight during these uncertain economic times. Relinquishing control of this asset would be irresponsible, especially in light of the widespread corporate excess that led to government bailouts.
House Transportation Committee Chairman Joseph Markosek
25th District, Pennsylvania House of Representatives
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