Drivers on the Maine Turnpike can expect to see another toll hike in seven years, according to one of the country’s major bond rating agencies.

A 29 percent toll increase in 2028 may be necessary to fund future construction projects, it said, including a proposed highway connection between the interstate and communities west of Portland, and a possible highway widening in southern Maine a decade from now.

Fitch Ratings this week reaffirmed its AA- rating on $553 million of outstanding debt held by the Maine Turnpike Authority. The rating means the authority is a safe investment with very low risk of loan default, although it falls slightly short of AAA, the highest possible rating.

Fitch’s analysis said the authority’s strong rating is tied to its maturity and reliable revenue from year-round and tourist traffic. The authority maintained its position despite heavy revenue losses in 2020 during coronavirus lockdowns and travel restrictions.

But Fitch also pointed to the authority’s ability to raise rates, including a 13 percent toll hike this year and another increase years down the road.

“Historically, management has demonstrated a willingness to increase revenues through periodic, above-inflationary toll rate increases to ensure the funding of capital needs and to maintain financial flexibility, with the most recent increase taking effect November 2021,” Fitch said in a news release.

“The authority anticipates the next toll rate increase will be in 2028 at 29 percent,” Fitch added. “Since 1999 the MTA has raised tolls five times, all at levels above inflation with minimal political pushback.”

In the last 23 years, toll increases have ranged from 13 to 25 percent, according to data from the Turnpike Authority.

Last month, the authority increased tolls at the busy York plaza from $3 to $4, hiked per-mile charges for E-ZPass customers and reduced commuter discounts.

Turnpike Authority officials said toll increases were necessary to overcome a $60 million revenue shortfall in 2020 and fund ongoing construction projects. The agency also needed a stronger revenue stream to satisfy stricter rules from credit rating agencies and to secure new borrowing.

Higher tolls received little public pushback. In September, just 13 people attended a joint in-person and virtual public hearing about this year’s increase.

Turnpike officials, in interviews this week, first said a possible future toll increase would be 25 percent, slightly less than Fitch’s projection.

“There is always a point in the future that you need to raise tolls to deal with inflation,” Turnpike Authority Executive Director Peter Mills said in an interview.

That increase might not be needed at all, depending on whether the Turnpike Authority moves ahead with building a highway that connects Gorham to the Maine Mall area in South Portland, turnpike spokeswoman Erin Courtney said.

“(We) had always planned to have a toll increase in 2028 – with the assumption that the Gorham connector project moves forward. If the Gorham connector didn’t go forward, we would not need a toll increase in 2028,” Courtney said.

The Gorham connector, intended to reduce traffic congestion on commuter roadways west of Portland, has roots that go back more than a decade. In 2017, the Maine Legislature granted the Turnpike Authority approval to build a road and borrow up to $150 million for it.

The connector’s projected cost has since ballooned but could still be paid for with $1.50 tolls on the five-mile highway expected to attract more traffic, and tolls, onto the turnpike’s mainline.

Mills, the Turnpike Authority’s executive director, later clarified that building the Gorham connector is only one aspect of the predicted need for a future toll hike.

CAPITAL NEEDS GO BEYOND CONNECTOR

“The projected toll increase for 2028 takes into account capital needs that are well beyond what is required for the Gorham connector alone,” Mills wrote in a memo. “Although the Gorham project is certainly a factor, its projected cost of $223 million is relatively modest in contrast to the mainline’s own needs over the next 15 years.”

The turnpike’s budget relies exclusively on tolls because it does not receive state or federal taxpayer funding.

Fitch’s projected toll increase is based on nearly $1 billion in new construction costs, Mills said. Anticipated projects include improvements to highway interchanges in Saco, Biddeford and Wells, and highway expansions south of Portland starting in 2032. Major projects will likely be financed half with cash reserves and half with new borrowing, he added.

Even with higher tolls over the years, the Maine Turnpike is still far cheaper to drive on than some toll highways. It costs about 8 cents a mile to take the Maine Turnpike, compared with 51 cents a mile on the Chicago Skyway and Fort Bend Parkway in Texas, and 29 cents a mile on the Delaware Turnpike, according to an analysis by carinsurance.org.

“The Maine Turnpike is a 74-year-old public enterprise with one of the highest bond ratings among U.S. toll roads,” Mills said. “It is this rating that provides us with the flexibility to manage our capital program efficiently and at reasonable cost. Our toll rates remain among the lowest among U.S. agencies.”


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.