Turnpike Commission OKs 2012 Toll Increase

HARRISBURG, PA (07/21/2011)(readMedia)-- The Pennsylvania Turnpike Commission this week approved a 2012 rate schedule that will result in overall toll-revenue growth of 3 percent. The measure, effective Jan. 1, 2012, is expected to generate approximately $23 million in new revenue for calendar-year 2012. It entails a 10-percent toll increase for cash-paying customers but no rate increase for those who pay with E-ZPass. Because E-ZPass toll rates will not go up in 2012, E-ZPass customers who currently enjoy as much as a 7 percent savings on Turnpike tolls will be eligible to save approximately 17% next year.

"Implementing a cash-only toll increase accomplishes two essential goals: It generates the revenue we need to satisfy our annual funding obligation to the Commonwealth of Pennsylvania, and it encourages more travelers to sign up for E-ZPass," said Turnpike Commission Chief Executive Officer Roger E. Nutt. "At the same time, it helps diminish the economic impact of a toll increase; since nearly two-thirds of turnpike travelers already use E-ZPass, only about a third of our customers will be affected. Cash customers can avoid this increase by signing up for E-ZPass."

At 12:01 a.m. on Jan. 1, 2012, cash rates will be increased by 10 percent. The increase will be applied to all vehicle classes on all turnpike sections except the Southern Beltway (Turnpike 576) in Allegheny and Washington counties, where rates will stay unchanged. With the new rates, the most-common cash toll for passenger vehicles will increase from $1.10 to $1.25, while the most-common cash toll for a standard commercial-truck classification (Class 5) will rise from $8.95 to $9.85.

Turnpike Chairman William K. Lieberman explained that it makes sense on several levels to encourage more motorists to get E-ZPass.

"Clearly, the commission has both economic and customer-service reasons to encourage customers to switch to E-ZPass, and that's why we decided to sweeten the incentive," Lieberman said. "Collecting tolls electronically is not only safer, faster and more convenient for customers, but it also reduces the commission's annual operating costs."

The commission's cost to handle a cash transaction is about four times more expensive than the cost of processing an E-ZPass transaction; it costs the commission about $1 per transaction to collect a cash toll, and less than 25 cents per transaction to collect tolls electronically by E-ZPass.

The Pennsylvania Turnpike manages more than 970,000 active E-ZPass accounts (including trucks and passenger vehicles) with a total of more than 1.4 million Pennsylvania Turnpike E-ZPass transponders in use.

The toll discount applies to all private and commercial E-ZPass customers regardless of issuing agency or state in which an account was established. Presently there are 24 E-ZPass agencies in 14 states, largely in the Northeastern U.S., and more than 20 million E-ZPass transponders in use on toll roads, bridges and tunnels.

New revenue will be allocated to fund debt-service costs associated with the Turnpike Commission's funding obligation of $450 million per year to the commonwealth stemming from a 2007 state law. None of the increase is to pay for an enhanced capital-spending plan for the Turnpike which was approved by the commission in June.

"Act 44 of 2007 expanded the commission's duty by mandating annual contributions to PennDOT for broader, statewide transportation needs, including funding for highways, bridges and transit," CEO Nutt said. "Since Act 44's passage, the commission has thus far provided $2.95 billion in support for the commonwealth through the issuance of $3.4 billion in bonds."

To meet the mounting debt-service costs associated with funding Act 44, the commission has increased tolls annually since 2009. The 2012 increase will be the fourth annual toll increase needed to support Act 44 payments.

In addition to the 2012 toll increase, the commission also approved overall toll-revenue increases of 3 percent for 2013 and 2014 - though it did not specify precisely how much rates would increase for cash and E-ZPass customers in those years. The pricing differential between E-ZPass and cash will be determined annually approximately six months before the time of those rate adjustments.

"The commission has been implementing toll increases on a year-to year basis since 2009, and we felt it was important to start to plan farther ahead," Chairman Lieberman said. "By approving a 3 percent overall revenue increase in each of the next three years, the financial community and our present and future bond holders can see that we remain committed to adequately funding all of our financial obligations."

In light of the steeper E-ZPass discounts, the commission also approved changes to its commercial volume-discount program starting next year. Effective Jan. 1 2012, the 15 percent volume discount will be eliminated since all commercial carriers with E-ZPass will automatically receive an approximate 17 percent discount. As a result, post-paid commercial E-ZPass customers will need to incur $5,000.00 to $10,000 of monthly tolls to receive an additional 5 percent discount and $10,000.01 or more to receive an additional 10 percent discount.

Getting E-ZPass is easy: Most Pennsylvania Turnpike customers enroll online at www.paturnpike.com or by calling 1-877-Penn-Pass (1-877-736-6727). Some Pennsylvania grocery retailers also offer E-ZPass sign-ups at the customer-service desks, including Acme Markets, Karns Foods, Giant Eagle and GetGo. Customers can also open an E-ZPass account at many of the state's AAA offices, and at E-ZPass vending machines called Tag Tellers at select Pennsylvania Turnpike travel plazas.