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Gov. Rendell Opens Special Session On Transportation Funding, Outlining Options

In his speech to the joint legislative session, Gov. Rendell outlined four potential solutions and a menu of possible revenue sources. Below is an excerpt in which he outlines those options:

           "The first option is to find a way to plug that half a billion dollar hole for this year and perhaps next year too, and put off addressing the long-term problem. This approach would give the next governor time to consider the issue and engage with the Legislature on a comprehensive solution.
            "To give you an example of such a short term fix, given our low level of debt per household and our excellent debt rating, the Commonwealth could borrow a billion dollars to fund the two year Act 44 hole. Doing this would increase our debt service payments by $80 million for the next two decades, but it would certainly provide the minimal level of funding and some breathing room.
            "If you choose to focus on just a short-term fix, despite the fact that I believe it is shortsighted, I will sign your bills into law and hope that the next legislature and governor have the will to address the long term problems before us.
            "The second option is to solve the entire Act 44 funding problem so that over the next 46 years, the capital improvements envisioned in Act 44 would occur. This would mean you enact new revenues sufficient to fill the entire Act 44 funding gap for the next 46 years. I don’t believe this is the best answer because, as the Transportation Advisory Commission report makes clear, this level of funding is far less than we need. However, I would still sign this legislation into law more enthusiastically than the short term fix.
            "The third option is for us to work together to put sufficient revenues on the table now, to fully repair and improve our transportation system at the level that is truly needed. I believe this is the right course to take. This approach will require courage, but in my mind, it’s the only solution that will have a lasting legacy for generations to come.
            "Given our many spirited differences in the past, it should come as no surprise to anyone in this chamber that I have no interest in waiting. I favor the third option; that is, acting now to address the long-term transportation challenges that confront us, both because it will make Pennsylvania more competitive, and because doing so will put tens of thousands of Pennsylvanians to work in good-paying jobs, both at construction sites and in our factories. …
            "The fourth, of course, is for this Special Session to conclude with you taking no action.
            “That would be totally unacceptable to me and a disaster for our state. It would cripple our transportation network, making us less competitive, diminish the quality of life of our citizens and imperil public safety."
            On potential revenues, Gov. Rendell outlined a variety of options:
-- Borrow $1 billion to cover two years of the Act 44 shortfall. Rendell said that would increase debt service payments by $80 million for the next 20 years, but “it would certainly provide the minimal level of funding and some breathing room.”
-- Create public-private partnerships. “I think P3s are a ‘must do’ approach, and nearly all of us agree on that point. I hope P3 legislation will be an outcome of this Special Session,” he said.
-- Apply to toll I-80 or I-95, with the revenues from doing so going toward improvements to those roads only. Rendell cautioned that would require a two-year delay, but could free up Motor License Fund dollars for other projects.
-- Increase the Oil Company Franchise Tax, which is a levy on the wholesale price of gas. That tax was capped in 1981, setting the wholesale value at $1.25 per gallon. Rendell said the wholesale value of gas today is $2.12. Uncapping that tax could bring in $900 million annually, but would mean a 14-cent hike for consumers. If the tax was based off a wholesale price of $1.80 per gallon, it would raise $500 million a year and would be a 9-cent increase, he said.
-- Increase the gas tax at the pump. Currently it is 12 cents per gallon, and was last increased in 1983. Rendell said indexing that tax to inflation would raise it by 4 cents, and would generate $260 million a year.
-- Raise the driver’s license fee. That fee is $33 for the standard initial license, and $28 for a renewal. Rendell said raising those fees by a dollar brings in $2.4 million.
-- Raise vehicle registration fees. Increasing the $36 car registration fee by a dollar would generate $8 million, Rendell said. Boosting all vehicle-related fees consistent with inflation would generate $327 million annually, he said.
-- Use technology to crack down on reckless or uninsured drivers. Doing so could generate almost $100 million a year, Rendell said.
-- Increase turnpike tolls. Rendell cautioned that Act 44 “already provides for regular turnpike toll increases,” and that raising those doubly could drive away turnpike traffic.
                                Rendell Calls For More Cash For Roads
                                Legislators Tackle Huge Transportation Funding Gap
                                Rendell To Lawmakers-- Act On Transportation
                                Rendell Says PA Transportation System Will Be Crippled
                                Rendell Urges Legislature To Find Transportation Funds
                                PA Seeking New Route To Funding Roadblock
                                I-80 Tolling Remains Long-Term Option
                                PA Roads, Transit In State Of Crisis
                                Lawmakers Mull Privatization, Mileage Tax to Replace I-80 Toll
                                Billions Urged For PA Transit
                                3 Legislators Propose $1 Fee On Interstates At Borders
                                John Baer: Ed's Plea For $472M More In Taxes Is A No-Go Now?
                                Editorial: Special Session, Get Real
                                Editorial: Transportation Funding, Serious Solutions Needed
                                Editorial: New Transportation Plan Must Bypass Tolls

5/10/2010

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