The Federal Highway Administration announced Thursday that it did not approve an application from the Pennsylvania Department of Transportation and Pennsylvania Turnpike Commission to place tolls on Interstate 80.


The agency said the planned use of toll revenues does not meet federal requirements, as there is no basis to conclude that the proposed lease payments are legitimate operating costs.

"Tolling interstates is a viable option for many states to fund highway improvements or to improve performance conditions," Highway Administrator Tom Madison said. "Because we are legally bound to ensure applications for this program meet all congressionally mandated requirements, however, we are regrettably unable to approve this application."

Under the proposal, PennDOT would transfer I-80 to the Turnpike Commission and make payments. But FHWA officials said the application did not meet legal requirements for the correct use of toll revenue. Specifically, the application called for the Turnpike Commission to use toll revenue to pay annual lease payments to PennDOT. The federal agency noted that while under the program toll revenue can be used for lease payments, the amount of the payment is required to be based on an objective market valuation.

The Commission's application, however, included no information or data justifying the proposed amount for the annual toll payment or establishing that the level was based on an objective market valuation. The agency noted that earlier this year it had asked for just such justification as it reviewed the tolling application. The Commission, however, sent no additional information supporting the lease payment level, the agency said.

"There is simply no evidence that the lease payments are related to the actual costs of acquiring an interest in the facility," explained Administrator Madison.

The legitimacy of the payments was questioned by The Americans for a Strong National Highway Network, a coalition that includes members such as the American Trucking Associations, the Owner-Operator Independent Drivers Association), AAA and the American Highway Users Alliance, in a letter sent to FHWA officials late last month. (See "Coalition Urges Feds to Reject I-80 Tolls," 9/2/2008)

According to the Philadelphia Inquirer, the decision puts new focus on an effort pushed by Gov. Ed Rendell to lease the Pennsylvania Turnpike -- a proposal that faces stiff opposition in the Legislature.

In May, a Spanish company and a unit of Citigroup teamed up to submit the largest bid for the right to lease the Pennsylvania Turnpike for the next 75 years. (See "Pennsylvania Could Lease Turnpike in 75-Year Deal," 5/20/2008 ) But the chairman of the state House Transportation Committee has said that legislation to authorize the proposed lease will not get a vote in the committee he heads or on the House floor.