A non-partisan study of Pennsylvania’s transportation and transit funding problems was released this week as a prelude to solving this sector’s estimated over $2 billion funding shortfalls.

The Pennsylvania Economy League, commissioned by the Associated Pennsylvania Constructors; 10,000 Friends of Pennsylvania; the CEO Council for Growth, an affiliate of the Greater Philadelphia Chamber of Commerce; the Pennsylvania Environmental Council; the Allegheny Conference on Community Development; and the William Penn Foundation, benchmarked Pennsylvania transportation conditions and programs against similar industrialized states.

The report's primary recommendations are:

· Regionalism should play a greater role in transportation policy decision-making and funding. Pennsylvania's state leadership and transportation officials should reconsider the regional role in transportation decision-making and funding, including granting greater responsibility for regional transportation decision-making, and permitting regions to explore alternative financing mechanisms and regional taxing authority to address unique regional needs. However, regional funding should supplement - not replace - the state's ongoing role in providing baseline transportation funding.

· Prudent use of debt should be considered among the ways to finance long-term infrastructure projects. Such projects could include major road reconstruction, capacity enhancement, capital projects and investments in public transit infrastructure. However, any increase in bonded indebtedness should be accompanied by a clearly-defined revenue stream dedicated to retiring the debt.

· Public-private partnerships of all kinds should be explored and considered as part of the solution. Though not the only option for public-private partnerships, long-term leases are the most publicly-debated; any revenues coming from a long-term lease of Pennsylvania infrastructure should be dedicated to transportation projects.

· Future revenue sources should be dedicated, predictable and inflation-sensitive. Any solution to the transportation funding crisis should include a dedicated, predictable funding stream (or streams) able to grow with rates of inflation within the transportation industry. Solutions that do not provide for future growth are stopgap measures and future decision-makers would face another financial crisis in the near future.

On funding mechanisms, the report said increasing the gas tax or vehicle registration fees are only “stopgap measures.” The study did list options like a registration fee schedule linked to total Vehicle Miles Traveled or the value of vehicle – or adjusting the floor and ceiling of the Oil Company Franchise Tax to make it once again responsive to inflation.

Other alternatives included an increase in or dedication of a portion of a non-transportation-related tax, such as an income or sales tax. The report emphasized a balanced approach should include a variety of options that are adequate, predictable, and likely to grow with inflation, preserving purchasing power.

Brian Hill, president of the Pennsylvania Environmental Council, said, "transportation touches on a host of issues important to Pennsylvanians - mobility, equity, job creation, and sound land use practices. This study provides a context for what is happening here compared to other similar states, and provides recommendations on new approaches to policy that will serve the Commonwealth well in the long term."

Janet Milkman, president and CEO of 10,000 Friends of Pennsylvania, said she hoped the report and its endorsement by such a diverse group of sponsors would serve as a model of cooperation for elected officials to emulate. "We all agree that it's not just about money - it's about economic competitiveness and how we grow. The report says we need to change the way transportation decision are made, especially with respect to land use and development."

The study is available online.

NewsClip: Another Option for Road Funding

10/13/2006