(The Center Square) – As lawmakers toil over a proposal to toll nine bridges across Pennsylvania, one industry group said COVID-19 relief funds could offer a different path.
Bob Latham, executive vice president of Associated Pennsylvania Constructors, told the House Transportation Committee this week to award $1.3 billion in new contracts – referred to as “lettings” within the road construction industry – from the $7.3 billion allocated to the state via the American Rescue Plan.
Latham said lettings totaled $1.6 billion in 2020, the lowest level recorded since 2006. At the same time, transfers from the state’s Motor License Fund – gas tax revenue meant to fund road and bridge repair – to supplement the Pennsylvania State Police exceeded $801 million, a 29% increase since 2013.
About 74% of funding for transportation projects comes from gas tax revenue, PennDOT said. APC estimates over the past 20 years, more than $15 billion in gas tax proceeds has been siphoned into the general fund to cover expenses “not related to highway improvement.”
“I think there is some appropriate level for highway safety and highway patrol, but we’ve overdone it from our perspective,” Latham said.
The tolling plan came out of Act 89, a sweeping infrastructure bill enacted in 2013 that boosted construction spending and authorized a private-public partnership (P3) program to leverage investment in transportation projects. The state paid for the new slate of projects through a combination of raised fees on vehicle registrations, traffic fine violations and increases to the Oil Company Franchise Tax.
At the time, Latham said, Pennsylvania ranked No. 1 in the nation for deficient roads and bridges – a designation its slowly chipped away at over the past seven years.
“We are down to number five now, so that’s progress,” he said. “The point is when you fund capital infrastructure, you make progress. You improve safety, you improve mobility and you put people to work.”
Latham said tolling bridge users could be part of a larger plan to fund bridge repair and construction – mainly through the use of bonds. APC said the P3 program adds extra costs and “middlemen” to the borrowing process that could be saved if PennDOT took control of the entire plan.
Except, said PennDOT Secretary Yassmin Gramian, state and federal law prohibits the agency from borrowing for construction projects or implementing user fees to pay those bonds back. The P3 program, she said, is the only way to implement the toll, short of legislation that authorizes PennDOT to do it another way.
“The proposal that Mr. Latham proposed is a good one,” she said. “But we don’t have the authority to borrow or the authority to toll.”
Minority Chair Mike Carroll, D-Luzerne, noted that such a bill would generate a lot of controversy in the House.
“The suggestion that we do such a thing has merit, but there are legislative and policy challenges to get that to the finish line,” he said.
PennDOT’s bridge tolling initiative could generate $2.2 billion over the next 30 years to fund bridge repair and maintenance, Gramian said. Though it’s an unpopular plan, it's one of the only solutions presented to solve the agency’s $8.1 billion annual funding gap.
Latham said reducing the amount of gas tax revenue that’s been transferred out of the Motor License Fund could support more construction, though it’d have to go far lower than the $500 million cap contemplated by the Legislature.
“We’ve heard a lot of talk about the gas tax in Pennsylvania and the fact that we have the second highest gas tax in the country … 11 cents of that [tax] doesn’t even go to road and bridge construction,” he said. “That’s more than $5 billion in highway user revenues … that is simply going into the general fund. That has had a huge effect on how we got here today and why we are here today.”
Carroll said another 13% of the gas tax supports other agencies, including local governments and the Departments of Agriculture and Revenue.
“When you add that all together, you’re talking about a substantial portion of motor fuel tax revenue that goes to entities not named PennDOT,” he said. “We simply cannot ignore the fact that the totality of all of those transfers have a detrimental affect on PennDOT’s ability to maintain a network that is among the largest in the country. That’s a horrible math problem for PennDOT. It’s unsolvable absent some other infusion of funds and that’s what going on here.”