Government Affairs Update
This is the monthly edition of our ASCE Philadelphia Chapter's Government Relations Report.
The Commonwealth faces a potentially catastrophic crisis in transportation and turnpike funding. Every year, the Turnpike Commission pays $450 million from toll revenue to PennDOT for transit projects.
The Turnpike Commission is more than $11 billion in debt, of which $6 billion is related to the commission's obligations for transit funding. The obligation of payments to the state will sunset in 2022 and drop to $50 million, but turnpike tolls will continue to increase through 2044 to cover debt service.
At the core of the financial crisis, the Pennsylvania Turnpike Commission is facing a major lawsuit, first filed last March from national trucking groups and a motorist association arguing that the practice of allocation of funds to PennDOT to fund transit projects around the state is unconstitutional and that tolls may only be used for turnpike-related projects. The plaintiffs are seeking a refund of $6 billion of PA Turnpike tolls collected since 2007, when the initial legislation authorizing the transfer of turnpike revenue was enacted.
Due to the lawsuit, the Turnpike has missed three scheduled payments to PennDOT in 2019 and the April payment will likely be missed as well. The suit also prevents the Commission from raising bond funding over the past year needed to make the payments to the state.
The suit against the Turnpike Commission has already led to $63 million in cuts for SEPTA's capital budget in this fiscal year and forced delays in 37 capital and system improvement projects.
At the House Appropriations budget hearing last month, PennDOT Secretary Leslie Richards testified that if the payments are not resumed, or if a decision in the ongoing court case is unfavorable to PennDOT, significant budget cuts would be necessary at the start of the new fiscal year July 1. Those cuts would impact subsidies to regional transit agencies across the Commonwealth, as well as programs serving transportation needs of the disabled and the elderly (Source).
On April 1, 2019, the Southeast Mobility group (consisting of leaders from infrastructure owners and businesses) released their recommendations to allow localities to increase revenue.
ASCE will continue to monitor activity at the state and federal level that might impact our profession, the projects we work on, and the communities where we live.