"Riley Factor"

This article was featured in the May 2007 issue of Business Matters, the Chamber's monthly print newsletter.

Transportation Funding Plans Emerge

The issue of transportation funding is expected to be a very hot topic of discussion in Harrisburg in the upcoming months. 

The issue came into the limelight back in November 2006 when a special commission formed by Governor Ed Rendell issued a report highlighting the statewide transportation funding crisis and provided recommendations to address the challenges.

The Transportation Funding and Reform Commission report concluded that in order to fix the crisis, Pennsylvania should spend an additional 1.7 billion annually to adequately address all highway, bridge and mass transit needs.

The Commission suggested the state raise an additional $900 million more for highway and bridges by increasing the state gasoline tax by 12.5 cents a gallon and increasing registration and license fees, and, to raise an additional $760 million for mass transit through increases in reality transfer taxes.

Although many elected officials agreed with the premise that more money is needed---the recommendations received a very cool reception.

Since that time, a couple other plans have emerged.

The Governor acknowledged the transportation funding crisis in his February budget address and proposed two approaches to generate the $1.7 billion in needs identified by the Reform Commission:

• Leasing the Turnpike to generate $965 million a year for highways and bridges.

• Imposing a 6.17 percent tax on the profits of oil corporations to provide $760 million a year for public transit.

In addition to the Governor’s proposal, Representative Rick Geist (R-Altoona) and Representative Joseph Markosek (D-Monroeville), have introduced House Bill 555 that would address the transportation funding problems by:

• Allowing the Commonwealth to enter into public-private partnerships by permitting the leasing of existing assets including the turnpike and other toll facilities, mass transit systems, railroad operations or airports.

• Allowing the acceptance of unsolicited bids for construction of new roads or the expansion of existing roadways. Under this plan, a private company could submit plans to the state and pay all construction costs. As a result, the state would benefit by not incurring additional costs of construction and citizens would have additional options in travel and finding ways to avoid congestion. The private entity would be permitted to charge tolls to recoup construction costs for the new highways, etc. 

• Allowing PennDOT to proactively solicit bids from private companies. The process would be the same as unsolicited bids, but PennDOT would determine where the road or other transportation facility will be built and under what conditions.

That is three vastly different suggested fixes to the transportation funding dilemma.

However, the one common thread to each proposal is that more money will be needed on an annual basis to meet all of our highway, bridge and mass transit needs.

As the debate heats up, the Chamber will be examining the details of the various proposals and we will be communicating to our elected officials the importance of having the dollars needed to address all of our transportation priority projects here in Berks.