Senate Democrats: Transportation Funding Can’t Wait
HARRISBURG, August 23, 2010 – A number of Senate Democrats participated in today’s bipartisan, bicameral transportation caucus to review possible solutions to Pennsylvania’s current funding crisis. State Transportation Secretary Allen Biehler outlined administration proposals which include a cost-of-living increase on vehicle registrations, driver’s licenses and other related transportation fees as well as the imposition of a new oil company gross profits tax.
Senate Democratic Transportation Chairman J. Barry Stout (D-Washington) has been pushing for funding solutions and stressed the serious needs that must be met. “Maintaining safe roadways and providing reliable public transportation are some of the primary roles of government. The denial of I-80 tolling presents Pennsylvania with a very difficult challenge that must be addressed.”
Senate Democratic Appropriations Chairman Jay Costa (D- Allegheny) called today’s caucus a step in the right direction. “Without new sources of funding to repair deteriorating highways and bridges and to maintain our critical mass transit systems, we will not only be putting Pennsylvanians in jeopardy but putting our financial future in jeopardy as well,” said Costa. “If we allow further degradation of our bridges and roads, it will impact us economically and cost jobs.”
Stout, long recognized for his expertise on transportation issues, serves as a member of the Transportation Funding and Reform Commission and believes that addressing this funding shortfall must be a top priority in order to ensure the safety of every citizen. “I hope that today was the start of an effort by all members to work together to find a funding measure that can be implemented,” Stout added. “The problems we face will only worsen. In this particular situation, time is not our friend. We must come up with funding sources or risk paying a much higher price in the future.”
According to Costa, an oil company profits tax of 8% would apply to companies like BP and Exxon and the gross profits of their operations here in the commonwealth. Oil companies would be exempt from the Corporate Net Income tax.
“Because oil companies currently take advantage of tax loopholes to shelter a substantial amount of their income from Pennsylvania’s CNI tax, it is anticipated that the gross profits tax would generate new income for the commonwealth,” said Costa. “While no state currently levies an excess profits tax on oil company profits, Alaska, while Sarah Palin was governor, did enact a net profits tax on extracted oil that generates more than $6 billion annually.”
The infrastructure and service deficiencies across the commonwealth’s more than 39,000 miles of highway continue to grow. 10,000 miles of road need to be repaved, 70 percent of which are in “poor” condition and need urgent attention.
Mass transit was projected to receive about $412 million in the current fiscal year through Act 44 funding from tolling I-80. Without that funding source, the total dropped to $250 million, which will mostly be consumed by operating costs. Improvement projects will drop from $153 million to zero, resulting in increased maintenance costs to keep older equipment and facilities running.