Moody's Downgrades Turnpike Bonds, Cites Toll Concerns
By Tony Romeo
HARRISBURG, Pa. (CBS) - Moody's Investors Service has downgraded its ratings for billions of dollars in Pennsylvania Turnpike Bonds and cites toll hikes as one of its concerns.
In downgrading the underlying rating for $3.1 billion of outstanding senior lien revenue bonds from Aa3 to A1, Moody's says one of its concerns is that the turnpike may need higher than projected annual toll increases.
Prior to leaving office, former Auditor General Jack Wagner warned about the danger of mounting debt at the Turnpike under a six-year-old transportation funding law.
Wagner's successor, Eugene DePasquale, says Moody's action validates those concerns.
"The current path is unsustainable in the long term," says DePasquale.
But Turnpike spokesman Carl DeFebo says it was understood that the law that requires borrowing to pay for transportation projects could affect bond ratings in the near term.
"This was not unanticipated," says DeFebo.
Lawmakers are expected to tackle a new transportation funding scheme this spring.
