After some tinkering by the General Assembly, Gov. John Kasich on April 1 signed into law a two-year transportation budget that charts a new future for the state-owned Ohio Turnpike.
Kasich’s signature -- and his line-item veto of an annual reimbursement to railroad operators -- ended months of debate and speculation about what would make the final version.
Despite early talk of privatization, the turnpike will remain a public asset. The bill also raises the speed limit to 70 mph on rural highways and aims to raise billions of dollars for road projects.
But questions remain, and that brings us to Kasich’s recent appearance on "State of Ohio," a weekly program produced by Cleveland’s WVIZ ideastream and its Statehouse News Bureau.
During an interview, the Republican governor told host Karen Kasler that his proposal "would make sure we have lower tolls than we’ve had through the history of the turnpike."
The claim caught our ear because the plan, as has been reported by The Plain Dealer and others, calls for tolls to increase for at least 10 years. Was Kasich taking us out for a spin?
PolitiFact Ohio decided to find out how the Truth-O-Meter tolls.
Kasich taped the interview March 20, the same day the Senate approved a conference committee report that shaped the final version of his transportation budget. The House approved the report a day later. The bill did not change between March 20 and the April 1 signing.
So let’s examine the crux of Kasich’s turnpike plan.
The bill approved by the legislature allows the state, for the first time, to use revenue from the Ohio Turnpike for projects beyond the 241-mile toll road. By raising tolls in each of the next 10 years, Ohio can issue $1.5 billion in bonds to help pay for transportation initiatives that might have been delayed a decade or longer. Kasich hopes to leverage that bond money into an equal amount of federal and local cash, creating a $3 billion pot for roads and bridges in coming years.
The new law requires that 90 percent of the money be spent within 75 miles of the turnpike. The governor projects the work will support 65,000 jobs. And he hinted April 1 that Opportunity Corridor, a long-planned link from Interstate 490 through Cleveland to University Circle, might benefit.
So what about those "lower tolls" Kasich mentioned in his TV interview?
Here’s where it gets complicated. If you have an E-ZPass, the bill freezes your tolls for the next 10 years on trips of 30 miles or less. But that only applies to passenger cars -- not commercial trucks. For all others, the intention is to raise tolls at no more than the rate of inflation.
Kasich spokesman Rob Nichols cited these stipulations when PolitiFact Ohio asked about the governor’s remarks. Over 20 years, tolls have risen "almost three times the rate of inflation for cars," Nichols said, attributing the figure to a state-commissioned turnpike analysis.
The 2012 report from KPMG Corporate Finance LLC found that between 1993 and 2012, the rolling average increase in Ohio toll rates per mile was 7.2 percent for passenger cars.
"The increase in toll rates outpaced the average annual growth of CPI [the Consumer Price Index], which was 2.5% over the same time period," the KPMG report states.
KPMG now estimates annual CPI growth for the Midwest at 2.7 percent. Essentially, the Kasich administration intends to follow this inflation measure when capping future increases.
But "intends" is a key word here. Kasich did not favor writing the cap into law and lawmakers tabled an amendment that would have done so. Nichols said such language makes bond lawyers nervous. The bill also allows the state to lift the 10-year freeze on local E-ZPass tolls if "necessary to comply with covenants in bond proceedings in existence before July 1, 2013."
Despite bond market concerns, the Turnpike Commission is expected to commit to the inflation cap in a resolution that will be introduced at a meeting this week, Nichols said. While that would have less authority than legislation, Nichols accurately noted that any future governor, General Assembly or turnpike regime could undo any of the Kasich administration’s measures.
One last fact to consider. The 10-year freeze on short E-ZPass trips is not likely to benefit many turnpike motorists -- at least not to start. Only about 30 percent of the turnpike’s passenger car transactions come through the electronic payment system, according to KPMG.
Kasich said his plan would "make sure we have lower tolls than we had through the history of that turnpike." Yes, the bill aims to keep tolls from rising faster than the pace of inflation -- a practice that would stand in contrast to KPMG’s findings from the past 20 years. And, yes, the bill freezes tolls for 10 years on a small, targeted cross-section of turnpike users.
But not only are higher tolls a part of Kasich’s plan, they are integral to the concept. The increased revenue will allow the state to issue bonds to finance other projects. Furthermore, the inflation cap is not written into the law, and the state has an out from the local EZ-Pass freeze.
Ohio Turnpike drivers might be getting a better deal than they were before. But future tolls that do not climb as quickly as they might have in the past are not lower tolls. It’s not only misleading but ridiculous for Kasich to portray it that way.
The Truth-O-Meter says: Pants on Fire!
The Plain Dealer via cleveland.com, "Kasich signs transportation bill; higher tolls will pay for road building,"by Tom Breckenridge, April 2, 2013;
OhioChannel.org, "State of Ohio" interview with Gov. John Kasich, March 22, 2013;
130th Ohio General Assembly, Am. Sub. H.B. 51(transportation budget);
The Plain Dealer via cleveland.com, "Gov. Kasich wants to issue $1.5 billion in Ohio Turnpike debt for projects in northern Ohio,"by Tom Breckenridge, Dec. 13, 2012;
The Columbus Dispatch, "Governor’s road map: Kasich will keep turnpike under state control,"by Joe Vardon, Dec. 14, 2012;
Emails and telephone interview with Kasich spokesman Rob Nichols, April 1, 2013;
KPMG Corporate Finance LLC, "Ohio Turnpike Opportunity Analysis,"Dec. 12, 2012;
The Plain Dealer via cleveland.com, "Ohio Senate passes bill that hikes speed limit to 70 mph, allows $1.5 billion in turnpike bonds,"by Tom Breckenridge, March 13, 2013;
Ohio Senate Journal, March 20, 2013;
Ohio House of Representatives Journal, March 21, 2013
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