Rendell proposes fee increases to finance road and bridge repair

Posted: August 24, 2010

HARRISBURG - Gov. Rendell on Monday proposed increasing dozens of motor vehicle fees and imposing a tax on oil profits to raise $1 billion to fund road and bridge repair and public transit.

Rendell implored the General Assembly to take action immediately before the legislative session concludes in December, citing public safety concerns and the thousands of new jobs the funding package would produce.

"The time to act is now," Rendell told reporters at a morning news conference.

The new funding is needed to fill the gap left when the federal government rejected the state's proposal to charge tolls on I-80.

Rendell touted a poll that showed the public supports upgrading the transportation network and warned lawmakers that inaction could lead to deadly accidents and increase costs later.

"Sometimes you have to spend money to save money," he said.

Rendell proposed 70 percent of the total funding, or $700 million, go to repair aging roads and bridges and 30 percent, or $300 million, to public transit - with SEPTA receiving $200 million for both operating expenses and capital improvements.

But with the full House and half the Senate up for reelection, many lawmakers fear that it would mean political suicide to support any tax increases before November.

Rendell and Transportation Secretary Allen Biehler said there is legitimate concern that structural failures could endanger public safety. "We've averted tragedy by happenstance," said Rendell.

The state estimates that there are 5,646 structurally deficient bridges, the most in the country, and that more than 10,000 miles of roadway is in need of repair.

Biehler - who said it would take $3.5 billion to fully meet the state's transportation infrastructure needs - detailed the extent of the crisis for lawmakers in a rare joint meeting of the House and Senate on Monday.

The General Assembly does not return to work until mid-September and has only a few weeks to act before the November election.

Under the Rendell plan, motor vehicle fees - among them driver's license and vehicle registration - would be increased equal to the rate of inflation, and an 8 percent tax would be imposed on gross profits of oil companies doing business in Pennsylvania.

Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee, pledged to deliver the votes to pass the legislation. "It's not going to be easy, but we'll get this done," said Evans, who appeared with Rendell at the news conference.

Sen. John Rafferty (R., Montgomery), chairman of the Senate Transportation Committee, said he supports developing public/private transportation partnerships as a way to boost revenue and reduce spending. Steve Miskin, spokesman for the House Republican caucus, said one GOP proposal would merge the Pennsylvania Turnpike Commission with the Department of Transportation.

Senate Republicans, who control the higher chamber, have balked at the idea of any fee increases, and some Republicans contend that an oil-profits tax is unconstitutional.

Senate Majority Leader Dominic Pileggi (R., Delaware) said he agrees the state needs to address the transportation funding shortfall, but is not convinced it's the time or the right proposal. He said that he doesn't sense the House has the votes to approve the Rendell plan and that even if it did he would like to look at a "comprehensive tolling plan," meaning more roads than just I-80, as a way to meet transportation funding.

Rendell said that most motor license fees have not increased in at least 15 years and that the average Pennsylvania driver would pay an extra 33 cents a week.

The four-year driver's-license fee would rise from $21 to $25 (or from $28 to $32 if the mandatory photo charge is included), the cost of registration would increase from $36 to $49, and an inspection sticker would go from $2 to $5.

Rendell said oil companies would be "legally barred" from passing on costs to consumers.

Oil-industry lobbying groups swiftly denounced the proposal as unconstitutional and said the cost of an oil-profits tax would hit drivers at the gas pumps.

"We don't believe we can prevent a pass-through" to consumers, said Rolf Hanson, executive director of Associated Petroleum Industries of Pennsylvania, which represents major oil companies.

He said the tax would not just affect large oil companies but would cast "a very wide net" that could bankrupt local oil drilling and refining businesses.

SEPTA officials, who will go to Harrisburg on Wednesday to lobby for Rendell's plan, are "glad to see a proposal out there," SEPTA general manager Joseph Casey said Monday.

"It's still a long, uphill battle," Casey said, "but our hope is it is done sooner rather than later. Hopefully, the legislature won't pass it on to the new governor."

The $200 million for SEPTA would more than make up for the $110 million that was cut from the current capital budget for SEPTA because of the state funding shortage for transportation.

SEPTA has deferred dozens of projects, including the rebuilding of the decrepit City Hall subway station and introduction of a new "smart card" fare system, because of the loss of expected state funds. Unlike other Pennsylvania transit agencies, though, it does not face service cuts or fare hikes because of the state funding shortfall.


Contact staff writer Amy Worden at 717-783-2584 or aworden@phillynews.com.

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