HARRISBURG, PA. (APR. 11, 2008) — A new "study" of the PA Turnpike's operating budget is fundamentally flawed and reaches an erroneous conclusion that clearly reflects its author's political agenda, Turnpike CEO Joe Brimmeier said today.

Yesterday's Reason Foundation report hinges on the assumption that the Turnpike's cost of services includes operating and maintenance costs only - a false assumption. The Turnpike includes both operating and non-operating expenses in this line item.

The report showed the commission's operating costs more than doubled during the last seven years from $181 million in 2000 to $370 million last year. But, in reality, its actual operating-cost figures are $164.5 million in FY00 and $243.5 million in FY07 - a 48 percent increase.

As a specific example, consider that the Turnpike includes project expenses associated with its rebuilding effort in this line item. In 2007, project expenses represented $122.6 million of non-operating expenses. These are non-capitalized expenses related to the commission's FY07 capital plan.

"The authors either made a fundamental error - which they should immediately go back and correct - or they decided in advance of their analysis what conclusion they had to reach to justify their support for privatizing a vital public asset. Either way, the bottom line is that the 'analysis' is worthless," said Brimmeier.

Brimmeier pointed out that the major Wall Street bond rating agencies have consistently ranked the Turnpike as one of the most efficiently operated toll agencies in the nation. The Turnpike earns some of the highest ratings for its bonds as well.

Moody's Investor Service found that:

• The Commission has the lowest operations, maintenance and administrative expenses per roadway mile of any comparable turnpike agency in a national peer group assembled by Moody's.
• The Commission has the lowest debt per roadway mile of any similar turnpike agency in the Moody's study.
• The Commission's five-year toll revenue growth rate for toll revenue and total transactions is well above the median for peer group turnpike agencies.

"The experts - the real experts - are constantly reviewing our finances and transactions, and our record speaks for itself," Brimmeier said. "Wall Street has reviewed our financial projections that are the underpinnings of Act 44 and, once again, have given us favorable ratings."

The Turnpike remains committed to implementing Act 44, which was signed into law in July 2007 by Gov. Ed Rendell. The agency will shortly re-submit its amended application to the Federal Highway Administration (FHWA) seeking approval to toll I-80.

"We are working to answer all of the questions raised by FHWA. We expect that there will be more back and forth with the agency as they do their due diligence and conduct a thorough review," Brimmeier said.

To date, the Turnpike has provided PennDOT with $520 million in new funds for the state's transportation systems. Upon completion of a fourth payment to the commonwealth at the end of this month, the Turnpike will have provided $750 million in this fiscal year alone.

"We at the Turnpike have consistently - often voluntarily - shared with the public our financial documents, and we've freely discussed and circulated information on Act 44 related contracts, records and expenditures," Brimmeier concluded. "I call upon the Reason Foundation to publicly divulge its funding sources. Perhaps then they might be taken with some degree of sincerity."