Big Dig debt challenges Massport

Load nearly sinks Turnpike Authority

In the mid-1990s, state lawmakers were desperately searching for a way to pay the state's share of escalating Big Dig costs. To borrow the billions they would need, they found a financially stable government agency with a consistent source of income: the Massachusetts Turnpike Authority.

More than a decade later, the authority is unable to afford needed maintenance, has a credit rating just above junk bond status, and is in such a shambles that Governor Deval Patrick is drafting a plan to split it into parts and wipe it from the face of state government.

Under Patrick's plan, the details of which began to surface this week, most of the authority's responsibilities, including the Big Dig, would be shifted to the Massachusetts Port Authority, the entity that runs Logan International Airport, a financially stable government agency with a consistent source of income.

Will history repeat itself?

"No one is going to want to repeat the mistakes of the past," said James Aloisi Jr., an informal Patrick adviser and one of two Patrick appointees on the seven-member Massport board. "And one of the mistakes is that in the mid-'90s, we burdened the turnpike with excessive amounts of debt. And I don't believe anyone is contemplating anything like that in this plan."

Aloisi should know. He was the Turnpike Authority's lawyer from 1989 through 1996 and drafted the law that made the agency responsible for the Big Dig's finances. He now regrets that decision.

Aloisi suggested yesterday that the turnpike's $2.2 billion debt could be spread among several entities, but did not offer specifics on how it might be allocated.

"What the governor's done is he's given us an opportunity to have a fresh page, a new chapter, and getting it right," Aloisi said.

The Patrick administration has been silent on who would take on the debt, which now costs the turnpike about $100 million a year, hindering its ability to provide necessary maintenance for a major toll road and one of the world's most sophisticated tunnel systems.

The western end of the turnpike, which carries much less debt, would be taken over by the state Highway Department under Patrick's plan. The governor has proposed abolishing all tolls west of Route 128, except those at Stockbridge and Sturbridge, which collect money from New York and Connecticut visitors. That fulfills a promise by the state to remove western tolls, a pledge that some argue should have been fulfilled as far back as the 1980s, but is currently scheduled to take place in 2017.

Talk of merging the rest of the Turnpike Authority with Massport raises significant questions about the potential effects on Massport's strong credit rating and its overall stability. Massport has been focused primarily on running the airport, with secondary responsibility to run the seaport and the Tobin Memorial Bridge, a toll road that generates $10 million to $20 million in surplus every year. That money is now divided between bridge rebuilding projects and funding the seaport.

Despite its relative financial health, Massport faces its own challenges: dealing with a decadelong decline in its share of the region's air travel business, cutting its expenses this year as the airline industry weathers the national economic downturn, and attempting to build a $450 million rental car facility on its property.

An analyst for Moody's Investors Service said in an e-mail yesterday that the impact of a merger with the Turnpike Authority on Massport's credit rating would depend on details worked out by lawmakers.

"I don't think anyone wants [control of] the turnpike," said Senator Steven A. Baddour, the Methuen Democrat who co-chairs the Legislature's Joint Transportation Committee. "I've always said Massport is not a road agency. Their primary role is the airport. Let's not forget where 9/11 emanated from."

Despite the security challenges highlighted by the 2001 terrorist attacks, Baddour calls Massport the state's best-run authority and does not want to see it turned into "the next Turnpike Authority."

Like others, he maintains that he is open to reform possibilities. "I'm not critical of what the governor's trying to do, because there's no easy solution," he said.

Alan LeBovidge, the Turnpike Authority's executive director, said Monday that the Patrick plan would create a separate division within Massport to run the Big Dig, the Tobin Bridge, and the turnpike.

That structure could protect the authority from running afoul of federal law, which prohibits airports from diverting the fees they collect from airlines that are supposed to be spent on maintaining runways and terminals. But it also reinforces the possibility that the state would simply be creating another Turnpike Authority with a new name.

The chairman of Massport's board, John A. Quelch, declined an interview request yesterday and released a statement through Massport's communications department.

"We are currently conducting detailed analysis to explore whether and how we can help the administration in a way that will add value and efficiencies to the people of the commonwealth," Quelch said.

Patrick's spokesman, Kyle Sullivan, would not comment on specifics yesterday. "This plan is the start point, not the end point, in a broad, long-range reform initiative that will begin to be spelled out in the weeks ahead," he said in an e-mail.

Noah Bierman can be reached at nbierman@globe.com.