Transportation, Mass Transit and the Motor License Fund
Federal Highway Trust Fund
The future of the Federal Highway Trust Fund is uncertain. The federal Highway Trust Fund collects 18.4 cents of a federal gas tax and 24.4 cents on a gallon of diesel fuel. This money is allocated by the U.S. Congress based on a specific formula. Recent trends have shown the future viability of the trust fund is in jeopardy as revenues have not kept pace with outlays. In the last three years, Congress had to infuse money into this fund from the General Fund to keep it afloat. Congress will need to develop a dependable and stable funding source to address the states infrastructure needs.
Highway and Bridge Construction and Maintenance
In the Governor’s Fiscal Year 2012-2013 proposed budget, $810 million is to be used on Pennsylvania highways for repair, resurfacing, and reconstruction. This is a reduction of $80 million from current year funding, or a nearly 9% reduction. Pennsylvania has 39,743 miles of roadway to maintain and has the fifth largest state owned roadway network in the nation. Each year PennDot works to repair nearly 4,000 miles of roads. The General Assembly and the Governor have, in the past, directed attention and funding to resolve a large backlog of bridge maintenance needs. This, however, is no longer the case. The Department is anticipating being able to replace approximately 290 structurally deficient bridges in Fiscal Year 2012-2013. This is down from 320 in the 2011-2012 fiscal year and 442 in the 10-11 fiscal year. Also down significantly is the number of bridges per year that are able to be preserved. The Department is anticipating preserving 190 bridges in FY 2012-2013; down from 220 in FY 2011-2012, and 345 in FY 2010-2011. Without more investment into Pennsylvania’s highways and bridges, the Commonwealth will continue to lead the nation in the number of structurally deficient bridges.
The Governor’s 2012-13 budget flat funds Highway and Safety Improvements at the current year level. PennDot has the responsibility of executing and developing the most critical deficiencies on state highways, including safety and mobility issues. In addition, the Expanded Highway and Bridge program also contributes to Pennsylvania’s expanded construction and maintenance program. The Governor is projecting that this program will be funded at $165 million. The rejection of tolling Interstate 80 lowered this appropriation significantly.
Funding Crisis
Pennsylvania’s transportation facilities have long been a key component of economic strength and vitality for many decades. Today, much like the rest of the nation, Pennsylvania’s transportation infrastructure is declining at a rapid pace due to decades of underinvestment. With an emphasis on energy conservation, vehicles will continue to become more fuel efficient, which in turn means less money available to build and maintain highways and bridges. Repairs for agencies providing transit services within the Commonwealth have been put off while a search for a stable funding source continues.
To address the growing gap between the funding necessary to bring Pennsylvania roads up to adequate condition and the current funding, Governor Corbett established the Governor’s Transportation Funding Commission (TFAC) on April 21, 2011. The TFAC was tasked with finding $2.5 billion in additional, sustainable resources over a five year period to allow time for a gradual increase in fees. The current need for additional funding is at $3.5 billion, and that grows each year.
The TFAC held five meetings in Harrisburg from April to July 2011. In August 2011, the TFAC made their recommendations public. When developing the recommended funding package, TFAC was directed not to consider: raising the flat gas tax at the pump, leasing the PA turnpike to generate revenue, or assumptions of any additional non state-controlled resources, or changes in federal assistance or law.
The TFAC came up with a funding package that raised over $2 billion in revenue through various methods, with the large portion being raised by removing the cap on the Oil Company Franchise Tax. To date, Governor Corbett has yet to state which, if any, of the recommendations made by the TFAC he supports.
Mass Transit Programs
The Port Authority of Allegheny County is facing a major crisis funding its operations. The Port Authority has already begun the process to eliminate 40% of its routes, increase fares by 25 cents within zone 1, and reducing service on the remaining routes. All of this is intended to address a projected $64 million short fall in funding. Without a plan of investment of transportation and mass transit by September, the Port Authority will continue its downward spiral of funding short falls, followed by route elimination and fare increases. Governor Corbett must act to head off this disaster.
Mass transit programs are now funded directly through the Public Transportation Trust Fund which helps shelter them from budget cuts necessitated by the economic downturn. Primary revenue sources for the Public Transportation Trust Fund are a 4.4% share of the state sales tax, payments from the PA Turnpike Commission, and transfers from the Lottery Fund. The Governor is anticipating carrying a balance of $109.9 million over from the current fiscal year into 2012-13 and ending FY 2012-13 with a balance of $35.6 million.
Lottery Fund supported Shared Ride funding is budgeted to increase modestly by $1.98 million to total $81 million in the proposed budget. Dedicated mass transit revenues, state capital support and Lottery Funded Shared Ride appropriations will make more than $1 billion available for mass transit programs during the 2012-13 fiscal year.
Motor License Fund
The Governor originally estimated that revenues from the Motor License Fund for the 2011-12 fiscal year would be $2.416 billion. In the 2012-13 budget, the Governor revised that estimate to $2.408 billion. According to the Governor’s adjustments, liquid fuels taxes decreased by $140,000, motor licenses and fees decreased by $8.7 million, and other motor license fund revenues increased by $880,000.
The 2012-13 budget year carries an ending balance from the 2011-12 fiscal year of $148.6 million. This balance added to the projected revenues for the 2012-13 fiscal year of $2.434 billion will provide available funds for expenditures for the 2012-13 budget year of $2.582 billion. The 2012-13 budget plans to expend $2.507 billion and leave an ending balance of $74.3 million in the fund.
When only examining revenue from liquid fuel taxes, motor licenses and fees, and other motor license fund revenues, the Department is anticipating a $25.1 million increase in revenue from FY 2011-2012 to 2012-2013. The change from FY 2010-2011 to the anticipated revenue of 2012-2013 represents a nearly 3.5% decrease in revenue. Gasoline consumption is down due to smaller, more fuel efficient cars, and fees have not been increased to keep pace with inflation.
State police spending increased by over $4.76 million, or nearly 1%, in the proposed budget to over $569 million. Motor License Fund support of the state police has increased by about 75% over the last decade.