Time to turn off the Pike: Legislature intended for tolls to be eliminated

David G. Tuerck

September 1995

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."

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 August, 2004