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Pennsylvania Highway Contractors to Benefit From Turnpike Toll Increase

Wed January 21, 2004 - National Edition
CEG



HARRISBURG, PA (AP) With trucking firms surviving on razor-thin profit margins, a proposed 42 percent average toll increase on the Pennsylvania Turnpike will send some hauling contracts out of state and sink some smaller firms, a trucking industry association said.

With the Pennsylvania Motor Truck Association working to soften the increase, the proposal to raise rates was scheduled to be formally introduced Jan. 20 to the five-member Pennsylvania Turnpike Commission by the agency’s staff.

For trucks that register in the state’s eight commercial weight classes, tolls would rise by an average 5.3 cents a mile. But for 18-wheel tractor-trailers that haul bigger loads, rates would likely rise more than twice that, boosting the cost of traveling Pennsylvania’s turnpike to above that of the New Jersey and Ohio turnpikes and the New York State Thruway.

"It’s just astronomical," said Jim Runk, president of the Motor Truck Association, which represents 2,300 firms associated with the industry. "It could put a lot of small companies out of business if they don’t divert and go to other roads.’"

The association is lobbying the commission to phase in the increase over a period of years or build in discounts for vehicles equipped with E-Z Pass transponders or traveling during off-peak hours, Runk said.

The proposed toll increase puts truckers in a tight spot, Runk said. Profit margins are so thin that trucking companies would need to pass on the cost to contractors to stay in business, but competition is so fierce –– particularly from out-of-state outfits that pay lower taxes or insurance rates –– that passing on the cost could prompt contractors to hire another firm, Runk said.

Firms that have their own trucking –– such as the retail giant Wal-Mart –– may seek to recover the cost of higher tolls by charging more for goods in stores, Runk said.

On the opposite side, highway contractors look to benefit.

The toll increase would be the first general increase since 1991, and would be geared to help pay for a complete reconstruction of the turnpike’s 470 miles in the next 30 years.

Over the next decade, the increase would raise approximately $1.1 billion. Buttressed by a $1.6 billion share of current toll revenue and some additional bond issues, the commission hopes to raise a total of $3.4 billion for the rebuilding.

That means additional laborers, sales people for heavy equipment suppliers, and quarry workers to supply limestone, dolomite and more, said Brian Fraley, the director of field services for Associated Pennsylvania Constructors, which has 440 members from highway construction-related fields, including 200 contractors.

"You really need to try to look at the whole picture and see the good that it does in the state when there’s additional jobs and work out there," Fraley said.

One casualty of the higher tolls will be the number of travelers.

While tolls would rise an average of 42 percent, total annual revenue would only rise about 26 percent because commission staff expect use of the toll roads –– estimated at 180 million vehicles annually –– to diminish initially because of the higher cost.

Any toll increase would be delayed until Aug. 1 to allow truckers to work the cost into their contracts, although Runk noted that prices for 2004 contracts are already set.