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Guest Post: Taking Taxpayers for a Ride

transportation funding

by Lowman S. Henry
Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal and American Radio Journal

It is a law of nature that bureaucracies and government agencies always crave a larger share of the public treasury. In Pennsylvania, the undisputed leader of the pack is the public education establishment which has a voracious and insatiable appetite for taxpayer dollars.

A close second is the Pennsylvania Department of Transportation (PennDOT) which is always clamoring for more money – much more money. The public education and transportation behemoths have two traits in common: no matter how much their budgets are increased it is never enough, and neither shows any significant improvement in performance resulting from constant funding increases.

PennDOT kicked up the most recent funding controversy by floating a plan to place tolls on several major bridges in the commonwealth, supposedly to maintain and upgrade the structures. Predictably, the idea has been met with stiff opposition from commuters and the potentially affected industries.

Governor Tom Wolf has never met a tax he does not like – until now. He is empaneling a special commission to develop a plan to replace the state’s gasoline tax with a new funding scheme. The increased fuel efficiency of gas-powered vehicles coupled with the trendy push for electric cars threatens to drive gas tax revenue downward. The goal of the commission, of course, is to increase the flow of funding into PennDOT’s coffers.

At 58.1 cents per gallon, Pennsylvania’s gas tax is the second-highest in the nation behind only California. Just a few years ago, in 2013, higher taxes were levied on producers, the practical impact of which was to add about 30 cents per gallon to the price of gasoline for a cumulative hit of over $2 billion per year to motorists. Now, the agency is claiming it needs an additional $7 billion per year to maintain the state’s roads and bridges.

For decades successive governors and legislatures have slapped band-aides on Pennsylvania’s transportation funding formula. That approach has had a particularly negative effect on the Pennsylvania Turnpike, which is a separate state agency. In 2007 a law went into effect that has siphoned hundreds of millions of dollars from Turnpike coffers into PennDOT, some of which the commission has had to borrow. That in turn has triggered steep annual increases in turnpike tolls, more than doubling fares over that time frame.

The labyrinth that is state transportation funding is further complicated by the continued financial drain caused by public transportation. Both PennDOT and a portion of those turnpike dollars subsidize public transit systems. The biggest, the Southeastern Pennsylvania Transportation Authority (SEPTA) in the Philadelphia region and Port Authority Transit (PAT) in Pittsburgh are bloated, inefficient, and inept bureaucracies that have been resistant to reform due to union-driven political pressures.

Against this backdrop, Governor Wolf has ordered the establishment of a special commission to develop recommendations for changes to the current system of transportation funding. In a departure from his usual go-it-alone approach to governing, Wolf seeks to include legislators and transportation industry representatives on the commission.

This, however, should be viewed with great suspicion. The commission’s charge is to find a way to eliminate the gas tax and find funding alternatives with the goal of adding billions of dollars to the transportation budget. It is indeed time for the development of a comprehensive restructuring of transportation funding. But just throwing more money into the pot will not solve the problem.

Also needed is a streamlining and restructuring of the entire array of transportation entities operating in the state beginning with the Department of Transportation and the Pennsylvania Turnpike Commission and extending to the regional public transportation agencies. The system is beset with administrative bloat, funding inequities, and antiquated labor contracts.

There is universal agreement that roads and bridges, public transit, railroads, and airports are vitally important to the economic vibrancy of Penn’s Woods. Rather than take the politically difficult, but necessary step of developing the comprehensive plan needed to knit all the above together, state policymakers have taken the easy way out by just throwing money at whatever crisis happens to develop.

This is a unique opportunity to systematically address Pennsylvania’s transportation needs. Hopefully, the governor’s commission doesn’t turn into yet another way to simply suck more money out of taxpayers’ wallets but rather takes the first steps toward developing a sustainable transportation system.

(Note: Leo Knepper and Lowman Henry had a chance to talk about the Governor’s proposal. That video can be found below.)