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Anticipating state revenue, Pike board kills $100m toll increase

By Noah Bierman
Globe Staff / June 30, 2009
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After 18 months of threats, and three votes to raise tolls, the Massachusetts Turnpike Authority rescinded a controversial $100 million toll hike yesterday and will instead depend on money from a higher sales tax to cover its deficit.

Officials are hoping the infusion of cash buys commuters two or three years without a toll increase, but the law requires only that the state go without one for 12 more months.

“I think this will get us past the next several years, barring some unexpected circumstances,’’ said James A. Aloisi Jr., Governor Deval Patrick’s transportation secretary and chairman of the turnpike board.

The toll hike had been set to take effect tomorrow. It would have doubled rates at the harbor tunnels and increased them substantially at booths inside Greater Boston. The authority had begun printing new toll tickets, given the uncertainty surrounding the legislative budget process.

The sales tax increase - from 5 percent to 6.25 percent - dedicates $275 million to transportation. Of that, $160 million is reserved for the Massachusetts Bay Transportation Authority. While the money will reduce the size of public transit fare hikes, it will not eliminate them. Transportation officials have said they will release several options - within the next two weeks - aimed at reducing service and raising fares on the T by about 15 to 20 percent.

Aloisi said he wished there were as many strong voices protecting public transit riders as there were opposing toll increases and a higher gas tax.

Michael Kelleher, founder of StopThePikeHike.org, said his organization would not rest after today’s victory on the turnpike, vowing to launch an initiative to remove all tolls. A similar effort was struck down in 1998 by the state Supreme Judicial Court.

“We beat the toll increase today,’’ Kelleher said. “Within a year or two, we are definitely going to have another one.’’

If tolls are raised again, the Massachusetts Turnpike Authority will not be making the decision. Under a law signed by Patrick last week that made dramatic changes to the transportation system, the authority will officially disappear in November. Its $2 billion debt and maintenance responsibilities will be transferred to a new entity that will run almost every major road in the state.

Before that transfer, the Turnpike Authority is facing a more immediate financial problem. Because of a questionable investment made in 2001 and international problems in the credit markets, the authority could be forced to make a $268 million lump sum payment to Swiss financial giant UBS. Patrick administration officials are negotiating with UBS in hopes of avoiding the payment. Aloisi said the issue could wind up in court, but that “I am confident that we’re going to be OK at the end of the day.’’

In addition to eliminating the Turnpike Authority, the transportation bill signed by Patrick last week stripped the Massachusetts Port Authority of a lucrative asset - the Tobin Memorial Bridge. The toll bridge netted $18 million last year.

The change in oversight had an immediate negative impact on Massport yesterday, when Standard & Poor’s threatened to lower its credit rating.

Massport will remain largely independent under the new transportation law and remain in control of Logan International Airport and the seaport. Standard & Poor’s renewed the “AA-’’ rating on Massport’s $1.3 billion airport revenue bonds, but changed the future outlook on the bonds to “negative,’’ due in large part to the loss of the bridge.

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