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Originally Posted by City Wide
http://planphilly.com/articles/2019/...eid=322d8ab396
So the law suit against using turnpike tolls for mass transit is still on as it has progressed to the next level of appeals. Can someone with law knowledge please weight in why this law suit keeps the State from spending money its already collected? I can understand why SEPTA might not want to borrow money based on a cash flow it might not have in the future, but if the turnpike collects and/or borrows the money and hands it over to the State yearly or quarterly why not spend that cash? It's not like the turnpike is going to send refund checks out if they lose the law suit. If they lose the tolls will go down and hopefully the State will need to find a more logically method of funding transit.
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I believe that the Pennsylvania Turnpike has not been issuing debt, so there is no money to transfer and I believe that reimbursement of the transferred funds has been considered as a possible catastrophic consequence of a ruling in favor of the trucker's association. The Pennsylvania Turnpike has not been funding the $ 450 million transfers directly with toll revenue, but issuing debt supported by its toll revenue. There might be a specific legal reason why the lawsuit might impair issuance of debt, but practically the Turnpike probably has expected that no underwriters would facilitate their issuance of debt and that buyers would be reluctant to buy it because of the potential risk implied by the lawsuit. I don't recall exactly what it is, but Pennsylvania Turnpike debt has a low rating. It's still investment grade, but at a lower tier. That imposes an additional problem, because riskier debt must pay higher interest for buyers to be willing to assume the risk, making it more burdensome for the issuer.
Debt issuance has always been the lifeblood of the Turnpike Commission*. When it was created, Pennsylvania had a low, fixed debt limit, which it sometimes circumvented by creating independent authorities, such as the Turnpike Commission, the served public purposes, but could issue debt that was officially not Commonwealth debt, thus not limited. (In theory, should the Pennsylvania Turnpike Commission default on its debt, no responsibility would fall upon the Commonwealth, but I can attest that PennDoT annually calculates how much of its revenue is available in the case of such a default to 'enhance' the debt)
*This is almost literal; section 15 of the
Turnpike Commission Act provides that when the Commission's debts have been paid, it will cease to exist and the Turnpike will become a part of the Commonwealth highway system, thus no longer a toll road.