Time to turn off the Pike: Legislature intended for
tolls to be eliminated
David G. Tuerck
On a recent talk show,
an official of the Massachusetts Turnpike Authority was asked if
he thought the public was capable of understanding the legislation
under which the authority was created. His answer: "No they
can't... If you believe that your listeners, not trained in the
law, not trained in revenue bond authorities, can make decisions...
you're fooling them."
Image a candidate for
public office proclaiming that his constituents were insufficiently
"trained in the law" to understand the issues. Or the
CEO of General Motors saying his stockholders didn't know enough
about engineering to make fundamental decisions concerning the direction
of the company.
Statements like the Pike
official's epitomize the breathtaking arrogance that characterizes
governmental authorities, of which the Pike is but one example.
The managers of these authorities enjoy a free rein unknown by elected
official or private executive.
In early August, a grassroots
group called the Free the Pike Coalition submitted to the attorney
general an initiative petition for a proposed ballot question. The
question seeks the removal of tolls from the 135-mile turnpike extending
from Boston to the New York border. Although it does not call for
the abolition of the Turnpike Authority itself, it would end the
authority's entitlement to collect tolls, which make up the bulk
of its revenue.
A glimpse at history
is useful here. In 1952, the Legislature provided for the creation
of the authority and equipped it with a mandate: to build a road,
ensure its quality and dissolve itself upon the payment of outstanding
bonds issued to pay for construction of the road.
Concerning the assertion
that the 1952 law is impossible for lay people to understand, look
at what the law says: "When all bonds issued under the provisions
of this act...have been paid...the turnpike, if then in good condition...shall
become part of the state highway system and shall thereafter be
maintained and operated by said department free of tolls...and thereupon
the authority shall be dissolved."
"If the turnpike should, as some suggest, be perpetuated
as a paragon of highway and financial management, why shouldn't
it be treated like any other enterprise? Why should it enjoy
immunity from stockholder or voter oversight that is not enjoyed
by a phone company or an automobile manufacturer? "
That seems simple enough,
but the authority has perpetuated its existence by floating new
bonds in defiance of the 1952 law. On seven occasions - in 1954,
1962, 1968, 1984, 1986, 1989 and 1993 -- it sold bonds extending
its life well beyond the period contemplated by the Legislature.
The 1993 bond issue for $365 million extends the life of the authority
will into the next century.
Now, with the authority
in jeopardy, various interests benefiting from its perpetuation
have surfaced. One such interest has raised worries about how the
elimination of tolls would affect bondholders.
Apparently, it is not
enough that the proposed ballot question provides for the payment
of all outstanding bonds. Because the question effectively prohibits
the authority from issuing future bonds, some bondholders may worry
about the elimination of this source of funds.
Why should this matter?
No one consults General Motors bondholders before imposing safety
or environmental standards that might hurt car sales.
In his book, Shadow
Government, Donald Axelrod shows how governmental authorities
repeatedly have turned back legal challenges to their survival,
some doing so by invoking the sanctity of bond agreements. Axelrod
quotes a New York court's statement that "the obvious purpose
behind the creation of many such (governmental authorities) has
been the indirect achievement of some purpose that the state cannot
achieve directly because of various constitutional limitations placed
upon the state."
Thus, when an authority
floats bonds, it acquires immunity to attempts to hold it accountable
to its mandate or to constitutional restrictions. Voters are held
to a Faustian bargain: By vesting autonomy in an authority to get
around "various constitutional limitations," they surrender
their ability to oversee the management of the authority.
The bigger question posed
by the future of the Massachusetts Turnpike Authority, then, is
what it means about the way we govern ourselves. If worries about
bondholders are an obstacle to a ballot question aimed at honoring
a decades-old promise to Massachusetts voters, then we should not
stop with eliminating tolls from one stretch of highway. We should
ask whether the whole system of governmental authorities makes sense
in the first place.
If the turnpike should,
as some suggest, be perpetuated as a paragon of highway and financial
management, why shouldn't it be treated like any other enterprise?
Why should it enjoy immunity from stockholder or voter oversight
that is not enjoyed by a phone company or an automobile manufacturer?
One answer is that roads
are "public goods," that cannot be bought and sold in
private markets like phone calls or cars. This means we should do
what the Free the Pike Coalition wants: Fold the Turnpike into the
rest of the Massachusetts highway system, as the Legislature intended.
In any event, we should not preserve governmental entities whose
officials make us feel stupid for questioning their stewardship.
David G. Tuerck is
executive director of the Beacon Hill Institute and chairman and
professor of economics at Suffolk University. This article first
appeared in the Boston Herald on September 3, 1995.
Format revised on 18