Pennsylvania averted a transportation funding “crisis,” as Gov. Edward Rendell signed into law on July 18 a funding package that will eventually provide almost $1 billion per year for road, bridge and mass transportation improvements.
Jason Wagner, director of policy and government relations of the Associated Pennsylvania Constructors, said the road construction industry supported the transportation funding package, though he said it falls short of addressing total road and bridge needs.
“This is a good first step,” Wagner said.
In this fiscal year, the transportation funding plan will mean an infusion of an additional $700 million for transportation — $450 million for roads and bridges and $250 million for mass transit. By 2009-2010, the package will grow to provide $900 million per year in additional transportation funding — $500 million for roads and bridges and $400 million for mass transit systems. Beginning in fiscal year 2010-2011, an annual 2.5 percent cost-of-living adjustment will be added for road, bridge and mass transit spending.
On the revenue side of the equation, the package will:
• Raise tolls on the mainline Pennsylvania Turnpike by 25 percent in 2009, with a three percent annual increase in following years.
• Create a 50-year lease agreement between the Pennsylvania Turnpike Commission and the Pennsylvania Department of Transportation (PennDOT). The Pennsylvania Turnpike Commission will be allowed to operate I-80 as a toll road, and make payments to PennDOT for roads, bridges and mass transit. The federal government will have to sign off on tolling I-80, as federal money was involved in building the rural highway.
• Create $5 billion in debt backed by the state’s Motor License Fund.
• Allow debt financing for the existing Pennsylvania Turnpike.
• Require local matching funds for mass transit to increase from 13 to 15 percent. It would create an optional rental car tax and liquor by the glass tax in Allegheny County to fund mass transit’s increased local matching requirement.
• Require the state to look at performance criteria such as ridership capacity to determine mass transit funding.
• Require PennDOT and the Pennsylvania Turnpike Commission to study the concept of tolling I-95, and apply to the USDOT should any program allow I-95 to be converted to a toll road. The Pennsylvania General Assembly required its prior approval before finally converting I-95 to a toll road
• Earmark $35 million in new road and bridge funding for locally owned roads and bridges.
Wagner pointed out that Gov. Rendell created by executive order a bi-partisan Pennsylvania Transportation Funding Reform Commission in light of a funding “crisis,” that stemmed from a lack of new money for road, bridge and mass transit system improvements. That commission identified an annual backlog of $965 million in unmet highway and bridge needs. Wagner said the package amounts to “a good first step,” but recognized that the $500 million in funding achieved by 2010-2011 falls short of total road and bridge needs.
The Pennsylvania Transportation Funding Reform Commission identified particular problems with the condition of Pennsylvania’s bridge system, which may see growing attention as a result of the new money. The commission found that Pennsylvania is home to more than twice the national average in the number of structurally deficient bridges. It also found that state-owned bridges are now, on average, 50 years old. The commission also learned that more than one-third of 21,000 mi. of state-owned secondary roads are currently in “poor” condition.
Rendell had earlier described the package — which creates a dedicated revenue source for mass transit — as “historic.”
“Transportation is a vital part of Pennsylvania’s economy,” Rendell said. “Our economic future depends on a network of safe, reliable roads, bridges and public transit systems.”
Sen. Roger Madigan, R-Bradford, chairman of Pennsylvania Senate Transportation Committee, said he was “pleased, but not thrilled” with the road and bridge funding portion of the package, because he said it only addressed half of the state’s documented needs. The mass transit portion of the package, he said, will address the needs of mass transit operators well into the future.
Rep. Joe Markosek, D-Allegheny, chairman of the Pennsylvania House Transportation Committee, said the package will greatly improve mass transit systems across the state.
“As the House Transportation Committee chairman, I have made it a priority to convince my colleagues to develop a dedicated and sustainable source of revenue for mass transportation,” Markosek said. “This year, we finally made headway and can provide historic levels of funding to transit agencies across Pennsylvania and to maintenance programs for roads and bridges. Our infrastructure is deteriorating and becoming unstable and unsafe — we absolutely could not put this off any further. This was a huge victory for the citizens of Pennsylvania.”
Wagner, of APC, also said there’s some philosophical concern about how the package breaks Pennsylvania’s pay-as-you-go system of collecting highway fees for highway use. The agreement would collect additional fees from highway users, and divert a large portion to create a dedicated funding source for mass transit. Those new fees are generated from the 25 percent toll hike on the mainline Pennsylvania Turnpike and the I-80 lease and bond financing arrangement between the Pennsylvania Turnpike Commission and PennDOT.
Wagner said tolling Interstate 80 would be completed by using an “open toll system,” requiring patrons to drop money into a bucket, or gantry, at periodic collection points. Wagner said I-80 would be tolled using eight to 10 gantries across the northern tier of Pennsylvania. The Pennsylvania Turnpike’s existing east-west toll road, I-76, uses a “closed toll system” that features tickets and toll booths which require drivers to stop and pay their toll.
Eric Bugaile, minority director of the House Transportation Committee, said Citigroup was involved in analyzing the revenues available from the 25 percent toll increase on the mainline Pennsylvania Turnpike and the conversion of I-80 to a toll road. He said the revenue from the new tolls will, in the long run, create an adequate funding source to cover the $900 million in new expenditures for roads, bridges and mass transit.
“The transportation package will not create a growing level of deficit spending,” Bugaile said. “In the long term, this deal does not spend more money than we will collect.”
However, Bugaile pointed out that tolling I-80 would place added pressure on other “free” east-west routes in Pennsylvania, such as I-78.
Gene Barr, vice president of political and regulatory affairs for the Pennsylvania Chamber of Business and Industry, said the group supported the transportation funding increase, though he felt the mass transit portion of the funding package was “a little too high.”
“We see the need for some additional money for transportation,” Barr said. “We support a reasonable increase for highways and bridges.”
In the final days before its enactment, Rich Kirkpatrick, PennDOT press secretary, described the new funding arrangement as “a historic transportation funding package.”
Kirkpatrick said PennDOT, which had moved into the next fiscal year without the passage of a budget or a transportation funding increase, said the department was looking forward to the enactment of both.
Still, Pennsylvania must gain approval from the U.S. Department of Transportation to convert I-80 to a toll road.
Prior to the passage of the transportation package, Jim Runk, president and chief executive of the Pennsylvania Motor Truck Association, said in a published report that the group would consider the legality of the tolling proposal.
Speaking against tolling I-80, in a visit to central Pennsylvania, Congressman Jim Oberstar, D-Minn., chairman of the U.S. House Transportation and Infrastructure Committee, said he was “not a fan of tolls.”
“They’re taking existing capacity, built with federal highway trust funds, and charging you twice for it by putting a toll on it. It’s not fair to taxpayers. That breaks the trust of the highway trust fund. Tolls, as we’ve seen in Indiana and Chicago, can be diverted to other purposes.”
In late July, Congressmen John Peterson, R-State College, and Phil English, R-Erie, inserted an amendment into a federal appropriations bill that would prohibit the use of federal money to collect tolls on I-80. The federal appropriations bill provides money to operate the U.S. Department of Transportation. CEG