Turnpike Revenue Bonds

Abstract

These roads cost a total of $144 million, but only the Pennsylvania Turnpike could be considered a modern toll highway financed by revenue bonds. The beautiful 122mile Overseas Highway to Key West in Florida was simply a series of bridges and island roads built to replace a railroad which a tropical storm washed into the seas in the 1930's. The Merritt Parkway in Connecticut and the Westchester Parkway in New York are hybrids, in essence, being part of their respective highway systems. Table 1 shows that 596 miles of revenue turnpikes have been built and that additional mileage now under construction will shortly double this figure. From the following data it can be observed that the roads that have been built thus far have had an average construction cost of $980,000 a mile and that the roads now being built will have an estimated construction cost of $1,665,000 per mile. The higher cost per mile of the turnpikes now being built can be explained by two factors. In the first place, construction costs are now greater than they were when the first sections of the Pennsylvania and Maine Turnpikes were built. In the second place, some of the new mileage, such as the New Jersey Extension and the western portion of the Indiana Turnpike, involves the construction of costly bridges and the condemnation of costly real estate. As with a railroad, the real test of value lies not in the absolute amount spent for the mileage but rather in the relationship of the cost to the revenue-producing possibilities of that mileage. One of the most inclusive listings of all toll-road projects, whether financed by regular state credit or by revenue bonds, appeared early this year in a magazine article by Boughton* (see Table 2.) It seems likely that many of the roads in the last two classifications may not be built because of political opposition, unfavorable engineers' reports, or difficulty in raising funds. The gleam in the road planner's eye is often far removed from the opening of a new turnpike.