HARRISBURG — Public transit is a key issue holding up Pennsylvania's budget, but top Republicans have said they don't want to spend more money on trains, buses, and trolleys unless they also get funding for their own transportation priorities: roads and bridges.
These projects are costly at a time when curbing state spending has been the premier topic during budget talks, which have dragged on past the June 30 deadline.
State House Democrats attempted to cover both of these transportation priorities in a bill that passed the lower chamber 107-96 last month.
In addition to sending more sales tax revenue to public transit agencies — an idea proposed by Democratic Gov. Josh Shapiro in his last two budget addresses — the bill would authorize $500 million in debt for road and bridge projects.
The proposal would also create a commission to develop “a comprehensive, strategic proposal for addressing the transportation funding needs of this commonwealth” by Jan. 1. If the legislature fails to act on those recommendations, the bill would automatically double public transit funding in 2028.
State Rep. Ed Neilson (D., Philadelphia), chair of his chamber’s Transportation Committee, told Spotlight PA that such a ticking clock could keep lawmakers honest and move a deal forward.
“We're here to put up hard votes,” Neilson said. “When I first got here, I had to do a gas tax. I'm like, ‘This is crazy. I don't want to raise taxes.’ But it was the right vote to do, because I use the road more, I pay more, and it was a fair tax.”
The GOP-controlled state Senate hasn’t offered a transportation bill and hasn’t taken any action to advance the state House proposal.
“Everybody recognizes” that Pennsylvania has “an infrastructure problem” that requires a comprehensive solution, state Senate Majority Leader Joe Pittman (R., Indiana) told Spotlight PA earlier this year.
“But,” he added, “when I pose the question of how we're going to pay for it, I get a lot of ‘deer in the headlights.’”
Old roads, fewer resources
Repairs and expansions to Pennsylvania’s old, enormous system of state-maintained roads and bridges are largely covered by a gas tax — the third highest in the country — plus a number of driver fees.
Every year, some of the money earmarked for roads gets diverted to State Police. Additionally, the Shapiro administration predicts that revenue from these sources will decline as vehicles become more fuel-efficient. Meanwhile, inflation is rising, and the commonwealth’s roads aren’t getting any younger.
TRIP, a Washington, D.C.-based transportation research nonprofit, argued in a June report on Pennsylvania that these factors leave an increasing share of state roads and bridges, particularly those outside of the federal highway system, in poor condition.
“Conditions on these roadways and bridges are projected to deteriorate in the future, as PennDOT will be forced to allocate available financial resources to maintaining [interstate highway] routes to federally mandated standards, leaving fewer resources available for the local state-owned highways,” the report concluded.
A long-term solution would require a complete overhaul of the state’s transportation funding system — a heavy lift in a divided Harrisburg that struggled for years to agree on the right fee for electric vehicles.
A 2021 commission that studied the issue argued the state needs a host of new funding streams. Some of their suggestions included a mileage-based tax, more tolls, and levies on packages and food deliveries.
What’s on the table?
Like state Senate Republicans, Shapiro has mostly avoided offering specific details. During his February budget address, he said that “it shouldn’t be either/or” between car infrastructure and mass transit, but “should be both/and.”
“By investing in our roads, bridges, and public transit, we not only help Pennsylvanians get where they need to go, [we] also attract business and grow our economy,” Shapiro said.
His administration has continued at least one existing road funding effort.
The road and bridge money that the state diverts every year to cover State Police costs comes out of the Motor License Fund, which collects state gas tax revenue and most car and truck fees. That money is constitutionally required to be used for the construction, repair, and safety of public highways.
Critics of the arrangement have long complained that putting State Police under that funding umbrella is a stretch, and in his final budget deals, former Democratic Gov. Tom Wolf and the General Assembly began to reduce the transfers, freeing up those dollars to repave highways and replace bridges.
Shapiro has followed suit. In the 2022-23 budget, State Police received $518 million from the Motor License Fund; last fiscal year, the transfer was reduced to $250 million. In his most recent pitch, Shapiro proposed reducing the transfer by $50 million annually until 2030, when it would end.
If the legislature adopts Shapiro’s proposed reductions, $750 million will be freed up over the next five years for projects.
Those dollars could be used to repair roads. But one of the few concrete ideas in front of the General Assembly for road funding, proposed by the state’s highway construction lobby, instead calls for the freed funding to be used as a down payment for a big bond sale, to provide the state more up-front cash.
Bob Latham, an executive at Associated Pennsylvania Constructors, told Spotlight PA that eliminating the State Police reduction could be leveraged into $3 billion in bonds.
The influential association and its members are frequent donors to lawmakers’ campaigns. A Spotlight PA analysis of donations to legislative leaders found that the group’s PAC, highway construction firms, and engineers gave $2.5 million last session.
Under the group’s plan, the proceeds from that sale would be used to fix rural roads and bridges. These areas, Latham said, have received less money in recent years as the state has put its dollars toward bigger projects, mostly in more populous areas, incentivized by federal dollars from former President Joe Biden’s 2021 Bipartisan Infrastructure Law.
“There's only a finite amount of money available for PennDOT, and they're using a lot of it to match these pretty, pretty big projects, which, once again, very, very, very necessary,” Latham said. “But it leaves funding for these smaller paving, smaller bridge jobs out in rural counties a little bit wanting.”
There are more projects than even this plan could pay for, Latham added, “but this is a start, you know, and it kind of gets us through.”
However, this plan requires the state to take on additional long-term costs to pay off the bondholders with interest, something that can raise the hackles of fiscal hawks.
Right now, Pennsylvania’s road-building debt is relatively small, $688 million. The state made about $122 million in debt payments using gas tax revenue last fiscal year. Those debt payments are equal to approximately 2% of PennDOT’s annual spending on road construction and maintenance.
That wasn’t always the case. During the interstate highway construction boom in the mid-20th century, Pennsylvania borrowed heavily to ribbon the commonwealth with asphalt.
As a result, the state built up approximately $2 billion in debt, according to a 1978 article in the Lancaster New Era, with service payments taking up about a quarter of PennDOT’s budget at the time. The total spent on debt payments in one year analyzed by the paper, $360 million, was larger than the amount spent on new road construction and just a little bit less than the amount spent on road repairs.
With this history in mind, Pittman told reporters last month he was open to bonding — but only if the bridges the bonds paid for could stand for decades after the state settles the debt it incurred in the process.
“We get the time value of money, and we get to advance those projects and free up dollars elsewhere,” Pittman said.