The demise of the Turnpike? (part one)

Posted Wednesday, April 13, 2011 in Investigation

The demise of the Turnpike?   (part one)

by David Kaler

SOMEWHERE NORTH OF THE YORK TOLLS -- Everyone who drives a car and travels anywhere from Augusta and Lewiston to Kittery is intimately aware of the Maine Turnpike, if only because they grumble as they look for enough money to pay the tolls.  Even so, most agree, the Turnpike does a fine job of road maintenance. 

But how did the main north-south road in our state (an interstate highway) get turned over to a private corporation in the first place? How does it raise funds? And by whose authority was this power granted?

In the wake of recent concerns about spending practices – well more than half a million dollars was donated to charities and non-charitable institutions from 2005-2007, many of which couldn’t be adequately accounted for  (leading directly to the resignation of  Executive Director  Paul Violette after  23 years of service) – the public is questioning the management of the Turnpike for the first time. 

The Maine Turnpike Authority (Authority) was begun in 1941 as a toll highway to run adjacent to the Coastal Route One. With the advancement of the automobile, Route 1 was getting very congested with auto traffic. A study found that to open Maine to more commerce, a new highway was needed. 

Legislation finally took place in 1947, because the outbreak of World War II set back the original plans.  The act authorizing the Authority was created by LD 917.  The Maine Turnpike is the second oldest in America, only younger than the Pennsylvania Turnpike. It was envisioned to be a highway system whose revenue bonds would be solely from tolls.

The resulting act and the incorporation documents, referenced throughout this article, present a very clear idea of what both the state and the Turnpike Authority hoped for when they started building what must have seemed like a superhighway to Vacationland in 1947.  They also establish a very clear line between what was the State of Maine's interest in the road, and what was the Turnpike Authority's rights and responsibilities.

From Sec. 2:  Bonds shall not be deemed a debt to the State of Maine, but payable exclusively from tolls. All bonds issued by the Authority read, in part, “Maine is not obligated to pay interest, nor is the faith and credit of Maine pledged to such bonds.” The section was very clear that Maine taxpayers were neither directly nor indirectly obligated to make any payment whatsoever to the Authority.

The Authority was also responsible for all maintenance and all costs of operating the highways, tunnels, overpasses, and bridges along the route, which is mostly Interstate 95 in Maine, but includes a short ‘spur’ from 295 at Falmouth to connect with 95.  In later years, this would also include rest areas and facilities so that people were not obliged to leave the Turnpike to buy gasoline or food.

Maine Department of Transportation (DOT) is the successor to the Maine Highway Commission, which was in place at the time of the agreement between the state and the Authority, and those who wrote up the original agreement realized that the Highway Commission/DOT might have to make emergency repairs or provide other services, but that any expenses would be reimbursed by the Turnpike’s revenue from tolls.

There were other areas where the state and the Authority seem to have common interests, too.  The state can seize land by eminent domain for the Authority, for example, although the Authority must pay fair market value to those whose land is taken.  In recent years, this right has been in the news again, as the Authority wants to replace the York toll plaza, which would require taking some properties in southern Maine. 

The Governor also plays a role on the Authority board. The Governor appoints four of the board members to the Turnpike Authority.  The board keeps records of all its proceedings.  It may elect an executive director or general manager, whose expenditures and salary come from the Authority, not the state.  Since the recent examination of the Authority’s spending habits, the new director, Peter Mills, has said that the board will approve future expenditures, rather than the executive director.

But there is a limit to how much influence the state has over the Authority.  It is, essentially, a private corporation, and Section 7 states clearly that all monies received from tolls shall be applied solely to the cost of the Turnpike.  Bonds, too, are vested in a bank or trust company either within or outside Maine, and none of the trustees are permitted to convey or mortgage the Turnpike or any portion of it, even to the state.  The Turnpike is a tax exempt organization in Maine, and does not pay taxes to the state. All bonds issued by the Turnpike Authority can be exchanged only for Turnpike revenue, not for state funds.  Any work done on the Turnpike by the Highway Commission /DOT must be charged to the Authority, as though the state workers were any other contractors.  The Authority has the sole right to the tolls collected.  They are not governed by any state commission or agency.

At some point, the Turnpike Authority was expected to have been dissolved, although this obviously never happened.  When all its bonds and interest were paid off, the roads, bridges, and so forth were to have become the property of the State of Maine, and operation of the Turnpike would have been vested in the Highway Commission, which is now the DOT. 

Some $100 million has been redeemed by the State of Maine from the Maine Turnpike Authority since its inception.  The First National Bank of Boston in 1946 offered 15,000 bonds at $1,000 each.  The Maine Turnpike was the first highway construction project without federal or state dollars or credit.  The Maine Turnpike made history in its day.

The next set of bonds in 1953 for $75 million was hailed as “a break with the past” in ads designed to attract investors.

It is probably not a surprise that snowy Maine was the first turnpike in the nation to use left lane snow plows. Now all turnpikes and major roads use them.

Under the administration of Governor Paul LePage, the Turnpike Authority is being asked to contribute more of its revenue to the State Treasurer.  More about this next time.

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