NEW TRANSPORTATION ACT PROVIDES LONG-TERM FUNDING SOLUTION

     PHILADELPHIA, July 18, 2007 – State transportation funding will increase by $750 million next year, and by an average of almost $1 billion annually over the next 12 years, under legislation approved by the General Assembly this week and signed today by Governor Ed Rendell. It is the largest single-year transportation funding hike in Pennsylvania history. The plan will not require higher taxes.

     “These are significant funding increases that will solve the severe immediate problems for both highways and bridges, and for mass transit systems. We have structured it to grow with inflation, so we should not have to revisit transportation funding for several decades,” said state Senator Vince Fumo (D-Philadelphia), the primary architect of the proposal.

Click here to listen to an audio feed with Sen. Fumo about the transportation funding bill.

     Fumo joined Rendell at a bill-signing ceremony today in Philadelphia.
In the 2007-08 fiscal year, the legislation would direct $450 million to highway and bridge projects around the state and $300 million to mass transit. By the 2009-10 fiscal year, the total in new money would be $900 million – $500 million for highways and bridges and $400 million for transit. All amounts would increase by 2.5 percent each year afterward.

     Initially, the money would come from up to $5 billion in bonds issued by the Pennsylvania Turnpike Commission. The debt would be repaid over time by revenue from higher tolls on the Pennsylvania Turnpike beginning in 2009, and from new tolls to be collected on Interstate 80. The Turnpike Commission would enter into a fifty-year lease agreement with the Pennsylvania Department of Transportation (PennDOT,) which will require the Turnpike Commission to make payments to PennDOT. In return, the Turnpike will be given the authority to toll and operate Interstate 80.

     The funding model assumes toll increases of 25 percent on the existing Pennsylvania Turnpike, taking effect in 2009 and increasing by three percent annually thereafter. Tolling of I-80 would likely begin in 2010.

     The legislation also restructures all funding for mass transit. It would dedicate 4.4 percent of state sales tax revenue to public transportation, an amount expected to total $392.8 million in the 2007-08 fiscal year. That would replace $317.8 million that is now appropriated for transit from the General Fund, plus another $75 million currently dedicated from the sales tax. That conversion to a fixed percentage of sales tax revenue would help to ensure that the transit fund will grow with inflation.

     For the state’s largest mass transit system, the Southeastern Pennsylvania Transit Authority (SEPTA,) the new funding plan provides an increase of more than $156 million, or 44 percent, in operating funding, to a sum of $507.8 million in the 2007-08 fiscal year. Along with new dedicated capital funding of $57.8 million, SEPTA’s total state subsidy is $565.6 million.

     Other, smaller public transit systems in the state will see similar proportional funding increases.

     The need to increase money for Pennsylvania’s deteriorating highway and bridge infrastructure, and to assist perpetually struggling mass transit systems, had been one of the main financial imperatives facing state government as it crafted a new budget. The transportation plan was approved earlier this week by the House and Senate, along with other pieces of budget-related legislation.

     “Transportation is critical to our economy in so many ways. I believe everyone, on a bi-partisan basis, recognized the potential harm to our citizens and to our whole state’s well-being if we failed to put additional money into roads, bridges and transit,” Fumo said. “I am grateful for the support this plan has received, and for the suggestions that the Rendell Administration and Republicans and Democrats in the House and Senate contributed over the past several months. We worked very hard to design a creative new funding program without a tax increase.”

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To see several documents and charts containing detailed explanations of the transit funding plan, click here.