The fatal Big Dig tunnel ceiling collapse could trigger, in a worst-case scenario, toll increases for the Boston Harbor tunnels and the Weston-Boston stretch of the Massachusetts Turnpike, according to bond rating firms that monitor Turnpike Authority finances. If the Interstate 90 tunnel is closed for a protracted period, toll revenue falls as motorists avoid the Big Dig and downtown Boston. If repairs prove to be sufficiently expensive, the authority will face pressure to raise tolls or seek financial help from the state, Fitch Ratings said….
Terms of the 1997 bonds require that tolls at the harbor tunnels and Weston and Allston toll plazas rise by an unspecified amount in 2008. Both harbor tunnels charge $3 for automobiles, and the Weston and Allston toll plazas charge $1, or 75 cents for FastLane automatic toll payment subscribers. Tolls doubled in 2002 on the Turnpike Extension and rose by $1 at the tunnels.
Fitch warned that outrage over the tunnel collapse “may further exacerbate” the risk of public opposition to the 2008 toll increase [Gosh, d’ya think? -ed.]. For years, political leaders and voters from the western suburbs have complained about the unfairness of turnpike tolls being used to pay for the Central Artery project….
Ultimately, if the authority lacks the money to cover a combination of falling revenues and mounting expenses, raising tolls is probably the easiest solution, said Philip N. Shapiro, former chief financial officer for the Massachusetts Water Resources Authority and a former managing director for Standard & Poor’s who is now chief financial officer of Babson College in Wellesley. “What matters with investors and the credit rating agencies is that they have rate-setting authority they can exercise directly,” Shapiro said. “They already have the toll increase scheduled to take place, and if they have to do it a year or two early because traffic’s down and they’re in stress, that can happen.”
Yeah, that’s going to go over well.
but instead relies primarily on my own two feet and an occasional subway ride, I can’t say that I’d be opposed to a toll increase, particularly toll increases where people have the option to take public transit but choose not to. I’m not saying that they shouldn’t have that choice, but merely acknowledging that their choice puts more strain on the local infrastructure than mass transit, and so it doesn’t seem unreasonable that they pay to make that choice.
Refinance the Authority bonds with General Obligation Bonds that rely on more than toll revenue streams: Rating based on (1) debt load (2) revenue (tolls, taxes, etc) (3) economic environment of state (i.e., the wealth of the average household), (4) the diversification of industry in state.
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Do away with Authority then the revenue stream goes into the general treasury; toll part of I-93 and there’d like be no effect on the AAA rating.
Western Massachusetts (and other outlying communities) would not go along happily with a solution that pays for the CA/T out of general revenues.
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Creation of the Metropolitan Highway System was a condition imposed by the federal highway people and non-Boston legislators before the CA/T could begin in earnest:
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A penny of the state’s 5 cent sales tax goes to the MBTA. Now we are supposed to pay for the CA/T, too?
with paying for the Callahan Tunnel from General Revenue if the Tolls also went into General Revenue. That’s the math that wouldn’t harm the Bond Rating.
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It’s also the logic behind Romney drive to clean out the Authority and bring it under MassHighway: Authority a big, bloated, highly paid and highly (most expensive per mile in U.S.) inefficient organization.
If the CA/T bonds were covered out of general revenue, there would be no incentive to set tolls at a rate that covers the true costs. Taxpayers all over the Commonwealth would be paying for the tunnels, road and bridge whether they use them or not, and the big population center that benefits from the capital project would reduce its share of the debt service.
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I don’t argue with your assessment of the Turnpike Authority and the need for reform, however, I don’t know that MassHighway would provide a big improvement in good administration. They are accustomed to very cozy relationships with contractors and legislators, and I don’t know whether a merger would improve the Turnpike or just further degrade MassHighway. . . .
Gary,
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Q: 90 seems to me to a better road (smoother, wider) than 93. Do you agree? If so, is that related to fact that Pike is tolled (ie, is more $ spent because dedicated revenue comes in?)
Most expensive per mile road in US.
So because the government and private contractors screw up, the average commuter has to pay more? That money should come right out of the profits of the people who built the damn thing.
at least the ones that aren’t in chapter 11 by now.
I love the way the Globe describes a toll increase as the worst-case scenario. I kind of thought that people dying was worse than a toll increase…