Alternate Transportation Funding Model Floated as Lawmakers Debate Plan
As Pennsylvania lawmakers continue to debate a transportation funding plan, the left-leaning Pennsylvania Budget and Policy Center (PBPC) is recommending a plan that would fund road, bridge and transit projects through a mix of cash and debt financing.
“With a combination of cash that’s raised through a number of vehicles (fees) and responsible borrowing, that will reduce the up-front cost but better reflect the fact that these are long-term investments that will have a long use over many years,” said PBPC Director Sharon Ward.
Gov. Tom Corbett is telling state lawmakers "the time is now" to approve a major funding bill for Pennsylvania's roads, bridges and mass transit agencies. Corbett appeared at a state Capitol Rotunda rally Monday, because the state House may vote as early as this week on a proposal to pump billions into transportation projects and related needs.
Ward said some lawmakers are reticent about how this bill would affect consumers. She said the PBPC plan, floated as an alternative, would lessen the blow.
“By borrowing money, at least a portion of the funds that are going to transportation, it could help reduce the cost and reduce the size of that tax increase,” she said.
The $2.3 billion plan being considered by the general assembly would fund transportation by increasing gasoline taxes as well as a host of fees and other revenues collected by the state Transportation Department.
There are competing proposals in the House, including a Democratic alternative that doesn't include new limits on the types of local road projects subject to "prevailing wage" minimum pay requirements for public works contracts. At a hearing last week, Ward suggested the cash and debt plan to lawmakers and said Pennsylvania is a bit of an outlier nationally in the way it funds transportation.
“Most states rely on a combination of annual appropriations and some borrowing to pay for their transportation,” Ward said. “Pennsylvania relies very heavily on annual revenues and that makes it harder to fund the bigger investments.”
In a plug for borrowing, Ward likens the state’s transportation system to homeownership.
“Most of us don’t borrow money for our day to day expenditures, but we have a mortgage on our house because we intend to stay there for a long time, and transportation is just like that,” she said. “Road and bridge improvements and transit improvements can last 40, 50, or in the case of rail 100 years, and it makes more sense to pay for those over the course of their useful life.”
In her testimony before the House Finance Committee, Ward said the two bills currently being considered, HB 1630 and HB962, would create a permanent fiscal crisis for the commonwealth. Still, Corbett, industry and union leaders are urging lawmakers to pass a transportation funding plan sooner rather than later.
“Pennsylvanians can wait no longer to be assured their bridges will be safe and remain open, their highways will remain smooth, and their transit systems will be kept in place,” said Corbett in a statement. “No action on the compromise plan that all sides have hammered out in the last few weeks is not acceptable. Pennsylvania will suffer in many ways if this opportunity passes.”