The enacted gas tax and registration fee increases will provide more than $400 million for additional highway and bridge construction and maintenance. Approximately $208 million will fund new construction projects, while $196 million will be allocated for highway maintenance projects.

      The 38.5 mill Oil Company Franchise Tax increase boosted gas taxes by about 3.5 cents per gallon. Pennsylvania's total 25.9-cent gas tax is now the 5^th highest in the country. Combined state and federal liquid fuel taxes now total 44.3 cents per gallon of fuel purchased.

      Municipalities will receive 12% of the revenues generated by the fuel tax. The balance of the projected $196 million in new revenue will be distributed to counties for maintenance of state roads. The 1997-98 distribution will allocate $80 million of this new money through a revised maintenance formula. During the next five years an increasing percentage of these funds will be distributed through the new formula until the full amount is formula driven in the 2001-2002 fiscal year.

      The balance of funds will be given to counties on a project-specific basis for restoration, betterment, and resurfacing improvements. These funds will include a hold harmless allocation to insure no county receives less than its 1996-97 maintenance allocation, and $5 million to be dedicated each year to maintain dirt and gravel roads in order to reduce dust and sediment pollution.

      The new revenue, combined with an existing maintenance budget of $850 million, will provide more than $1 billion for annual maintenance funding. These existing revenues include $41 million for special resurfacing initiatives to be distributed to counties through a separate funding formula.

      New registration fees for passenger cars as well as trucks will be increased by 50 percent. The new fees will be effective January 1, 1998 for trucks and July 1, 1997 for passenger cars. The fee increases are expected to generate $208 million and will be exclusively spent on additional highway construction projects, including $28 million annually transferred to the Pennsylvania Turnpike Commission for construction of Mon-Fayette expressway projects.

      The new revenue will significantly increase total state support for new construction projects. These funds will supplement planned state funded highway construction of $215.5 million and $113.6 million for Bridge Program restoration and replacement.

      The final gas tax resolution provided a significant infusion of new state support for mass transit agencies throughout the commonwealth. The $150 million annual commitment of new dollars by the Ridge Administration will save many systems struggling to make up for lost federal support and declining ridership.

      These funds include $75 million in new dedicated revenue to be deposited into a restricted receipt account for transit. The first $54 million of this revenue will be used to restore lost federal operating subsidies. The funds are particularly important for smaller Class 3 urban systems and Class 4 rural transit systems. In many cases the restored funding will total more than their current state capital and operating subsidies combined.

      The balance of the $75 million allocation will supplement existing dedicated Public Transportation Assistance Fund (PTAF) programs, and will be allocated to local transit agencies based upon existing PTAF allocation formulas, including a $1.2 million set-aside for Community Transportation programs.

      The agreement includes a commitment by the Administration to provide an additional $50 million annually in bond funded capital assistance for transit programs. This new commitment is promised with the understanding that these funds will be in addition to $75 million in annual bond-funded capital commitments traditionally provided for transit agencies throughout the commonwealth.

      This commitment is crucially important for the Southeastern Pennsylvania Transportation Authority (SEPTA). The state's total $125 million annual commitment should allow sufficient revenue to fully fund vehicle overhaul, and other rail safety and environmental improvement projects crucial to the system's long term financial viability.

      The final $25 million of the new $150 million transit commitment would "flex" $25 million in discretionary federal assistance for transit programs. The distribution of the flexed funds can only be provided with the approval of local metropolitan planning organizations.

      The administration intends to distribute the new state and federal capital assistance based upon current subsidy distribution allocations, with 70.3% of the funds provided to SEPTA, 25.4% of the funds provided to Allegheny County's Port Authority Transit (PAT), and 4.3% of the funds divided among the smaller Class 3 and 4 systems. However, individual allocations may vary considerably from year to year based upon project status and other factors impacting implementation schedules.

      The attached spreadsheet details preliminary state operating grant, PTAF, and new revenue distributions among all urban transit systems. The final column shows traditional state capital distributions for the 1995-96 fiscal year to offer a general guide to possible future capital distributions.

      The final budget agreement includes a new $2 million appropriation for supplemental payments to Class 3 and 4 systems to support welfare to work demonstration projects. The budget provides a $4.4 million increase in Rail Freight subsidies. This increase had been promised to gain support for the gas tax.