Three years after passing a law to create a “long-term funding stream” for its transportation needs, Pennsylvania faces a transportation funding crisis that may result in a bill enabling public-private partnerships across the state as a way to help it shore up its transportation budget.
“We’re back to where we were five or six years ago,” said Joseph Markosek, the Democratic majority chairman of the Pennsylvania House of Representatives’ Transportation Committee, “but in a worse situation.”
The state faces a $484 million gap in financing needed just to fund high-priority capital improvements across dozens of public transportation agencies in Pennsylvania, according to the Pennsylvania Department of Transportation website. And to meet all its highway, bridge and transit needs, the state would need an additional $3.5 billion a year, according to the website.
Four years ago, a transportation funding commission said Pennsylvania needed $1.7 billion in new revenue to meet its transportation needs. So the state’s lawmakers went to the drawing board to
Nobody wanted to raise taxes then. And they still don't.
“Nobody wanted to raise any taxes then. And they still don’t,” Markosek recalls.
So the lawmakers came up with an alternative plan. They passed a law called Act 44, under which Pennsylvania would ask the Federal government for permission to toll Pennsylvania’s Interstate 80, a highway that crisscrosses Pennsylvania from east to west. The proceeds would be used to issue bonds for transportation needs.
“I signed Act 44 on July 18, 2007, because I believed that it represented an innovative and effective solution for our transportation challenges,” Pennsylvania Governor Ed Rendell said at a speech in front of the Pennsylvania legislature on 4 May.
But in April, the US Department of Transportation turned down Pennsylvania’s plan to toll Interstate 80 because Federal law doesn’t allow states to toll existing roads and use the proceeds for other purposes. The decision cut in half the $922 million of annual revenue lawmakers were expecting from Act 44.
“So now we find ourselves in somewhat of a crisis situation and that’s really how we got to this point,” said Markosek, adding that the refusal of the Interstate 80 tolling plan was “the straw that broke the camel’s back”. But other factors, such as the fact that Pennsylvania simply has a lot of old, decaying infrastructure, also contributed to the crisis, he said.
In May, Rendell called a special session of the legislature to address the crisis. One of the ideas being floated to resolve the crisis is a bill that would enable the state to enter into public-private partnerships (PPPs) to fund its transportation infrastructure. However, this will be the fourth time that the bill’s sponsor, Republican Representative Rick Geist, will be proposing such legislation.
This time, however, his luck may be different. Pennsylvania Governor Ed Rendell is a staunch supporter of PPPs and lawmakers such as Markosek, who opposed the Governor’s PPP proposal to lease the Pennsylvania Turnpike, are giving the measure their support.
“It would have to be a part of any solution that we have here for funding,” Markosek said. But he cautioned that lawmakers should keep a “realistic view” of what PPPs will and won’t do for the state.
“Sometimes folks get a bit too overly optimistic about what PPPs will actually bring to the state. There is really only certain projects that they are somewhat doable with,” he said. For instance, “the private people aren’t interested in investing on our rural bridges – there’s no return on investment.”
Piece of wood holding up a
To pay for these and other types of improvements that are unlikely to interest private investors, the state is considering raising its gas tax. At 32.5 cents per gallon, that tax ranks 10th highest nationally but hasn’t been raised since 1997. Markosek said “eight to twelve cents, in that range would be something that in our best efforts we could get done,” adding that each penny increase in the state’s gas tax adds about $61 million annually for the state’s transportation spending.
Other ideas include raising the state fee for vehicle registration, which, at $36 per car, is “comparatively dirt cheap,” Markosek said. And the state is even looking at additional revenues from gambling that may be used for transportation.
“Everything’s on the table,” Markosek said, but he cautioned that “none of this is politically easy to do.”
The special session of the Pennsylvania legislature is currently in progress and may last until 30 November.