When the framers of Pennsylvania’s constitution established the state’s transportation-funding mechanism, they required that revenue generated by fuel taxes – in addition to license and registration fees – be used exclusively for transportation purposes. Those who cause the most wear and tear on bridges and highways, they held, should contribute proportionately more to infrastructure upkeep.
It was, and could remain, a useful and fair system. Years ago, however, state lawmakers began taking increasingly larger amounts from a constitutionally protected special fund – the Motor License Fund – to help pay for state police operations. Their logic: patrolling highways qualifies as a “transportation use.”
At first, the diverted revenue was relatively small, but as times got leaner, the amounts increased as legislators confronted rising governmental costs while remaining averse to raising taxes. By the 2016-17 fiscal year, more than $800 million of Motor License Fund revenue was diverted to state police operations. This accounted for three-quarters of the entire state police budget.
At the time, legislators agreed to reduce the diverted amounts by 4% per year over ten years and cap the annual diversions at about $500 million. Without much time remaining in the 2020-21 fiscal year, however, the diverted amount is still more than $700 million, which represents 11 cents per gallon – about a fifth of Pennsylvania’s 58 cents-per-gallon state gas tax.
The diverted funds, totaling more than $9 billion since the early 2000s, were essentially used to subsidize the state’s General Fund. Today, though, it’s the Motor License Fund that needs help. After all, the state transportation department’s (PennDOT) construction budget has dropped to 2008 levels – a crisis, when considering the dire shape of Pennsylvania’s roadways.
Meanwhile, the General Fund’s fiscal picture has dramatically improved, with more than $7 billion in forthcoming American Rescue Act funds and a $3 billion surplus in General Fund receipts. In the short term, this presents a rare opportunity to solve Pennsylvania’s transportation-funding crisis by retaining thousands of workers in family-sustaining jobs, reclaiming some momentum in repairing infrastructure, and removing the state police from the Motor License Fund.
Associated Pennsylvania Constructors, which represents highway contractors, proposes to backfill the state police budget with a relatively small portion of the American Rescue Act money. This would give the commonwealth two years to devise funding solutions for the General Fund, as well as longer-term funding for bridges and highways. We call the initiative Rescue PA Roads.
In essence, it returns the equivalent of 11 cents per gallon – about $700 million per year – to the purpose for which it was originally intended: improving Pennsylvania’s bridges and highways. It would do this without necessitating an increase in liquid fuel taxes.
The need to address transportation funding isn’t unique to Pennsylvania. It’s a problem faced by states nationwide. The inability of Congress to reach a consensus on what infrastructure even is – let alone how to fund it and by how much – has thwarted efforts to fix the problem for years. How ironic that while infrastructure is a top priority for many state and federal lawmakers, we are nowhere near a consensus on what to do about it.
We have been pleased with the reaction this initiative has received among Pennsylvania’s legislative leadership, transportation committees, and Governor Tom Wolf. Many states – notably Maryland, Colorado, Utah, Georgia, Idaho, and Michigan – are planning to use budget surpluses created by American Rescue Plan revenue to invest in transportation projects.
We’re often asked whether this plan would obviate the need to toll large bridges across Pennsylvania to pay for their repair or replacement. No: this is a short-term plan, which has no bearing on any suggested funding initiatives. While we have questions about the tolling plan, we believe there is a role for tolling and public-private partnerships in a long-term, comprehensive transportation program.
Mobility – the movement of people, materials, and products in an efficient and timely fashion, through a fully integrated, multimodal transportation system – is an essential ingredient for economic expansion and better quality of life. This is the right time to provide for the mobility needs of all Pennsylvanians.
Robert Latham is executive vice president of APC, a trade association that unites more than 400 members, including prime and subcontractors, consulting engineers, material suppliers, manufacturers, and others with an interest in Pennsylvania’s road and bridge construction industry. The association has been serving the industry for more than 80 years and represents the majority of actively bidding contractors in the Commonwealth’s $1.6 billion highway industry.