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Transportation funding reform: Are we there yet?

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Transportation funding reform comes with some baggage that has to be carefully packed before the car gets on the highway. Or it may be left behind for the next trip.

Issues such as turnpike debt and prevailing wage are important to funding the state's transportation needs, many groups said. But the immediate goal is to move forward on core transportation funding and address other issues in time.

Trucking, construction and engineering groups say that's necessary to improve the state's infrastructure, public safety and improve the efficiency of the economy.

"We're dealing with a number of transportation problems," said Kelli Roberts, a spokeswoman for Gov. Tom Corbett.

The goal is to take it one step at a time, she said.

Fixing the past

One of the largest transportation issues is how to fix the shortcomings of the last major overhaul: Act 44 of 2007. That law banked a lot of the increased funding for transportation on tolling Interstate 80, having the Pennsylvania Turnpike Commission manage it and then make payments to the state over 50 years.

One problem: The federal government rejected the I-80 tolling plan, but under the law, the turnpike still needs to pay the state $450 million a year. To date, that's a little more than $3.7 billion, according to the turnpike commission.

That's meant toll increases on the turnpike every year since 2009 and total debt of $7.8 billion last year, a 26 percent increase from 2010, according to the commission.

"We're fine with the Act 44 payments eventually ending," said Bill Capone, a turnpike spokesman.

The Corbett administration has entertained the idea of phasing out the turnpike's obligation to the state in 10 years, but first it needs to lock down additional state funding for roads, bridges and transit through proposals such as uncapping the oil company franchise tax.

The administration doesn't want to repeal Act 44, because there are other parts that improved and modernized the state's transportation, Roberts said. A phase-out could be manageable, but it's not something the administration will tackle immediately.

"(The turnpike commission is) carrying debt, but they're OK," she said.

The problem is that the turnpike will continue to accrue debt over the next 10 years and that means fee increases on the toll road. It might only be a few cents per mile for passenger cars, but if you have large commercial vehicles, it could mean hundreds of dollars per trip.

"Even if the payments (to the state) end," Capone said, "the debt remains, and we have to generate enough revenue to meet our obligations."

Prevailing wage

Some legislators and other groups want to see prevailing wage laws addressed if additional transportation funding is going to provide the greatest good, particularly on the local level, where municipalities and counties have roads to pave and bridges to replace.

"I understand prevailing wage laws on big federal and state projects, but not on smaller local projects," said Rep. Stephen Bloom, a Republican representing Cumberland County.

Prevailing wage laws drive up labor costs and the price of a construction project, yet they might not necessarily reflect the local wage for that market, especially in rural municipalities, he said.

It's preferable to address prevailing wage reform at the same time as transportation funding, Bloom said. It will help municipalities get the most out of the $80 million that could be available to them under the governor's proposal.

"I don't think it has to be an impasse, but it certainly has to be on the table," he said.

About 800 Pennsylvania municipalities passed resolutions requesting prevailing wage reforms, said David Sanko, executive director of the Pennsylvania State Association of Township Supervisors.

Two proposed changes would be to raise the threshold for projects that require prevailing wages, he said. The threshold, $25,000, was set in 1962, when that amount of money went much farther than it would today, especially on transportation projects, where one local bridge could cost $1 million.

Another simple change would be to revisit definitions for "new construction" and "routine maintenance" so that a simple resurfacing of a road doesn't count as building a new road, Sanko said. That could save more than $300 million annually.

Prevailing wage can add 25 percent or more to some projects, and that can hurt municipalities the most, he said.

"On large projects at the state level, you can say, 'Well that's the cost of doing business,'" Sanko said. "In some communities, it's the difference between doing the project and not doing the project."

If a prevailing wage bill comes to Corbett's desk, he will sign it, Roberts said. But the administration has laid out its priorities and wants to move forward with those first.

"Would we like to tackle everything at once? Yes," Roberts said. "But we don't have the finances to do that."

Legislative lag

Legislative leaders did not respond to requests for comment on transportation-related issues. No response was received from the offices of the following legislators:

• Rep. Dick L. Hess, chairman, House Transportation Committee

• Rep. Michael P. McGeehan, minority chair, House Transportation Committee

• Sen. John C. Rafferty, chairman, Senate Transportation Committee

• Sen. Joseph B. Scarnati III, Senate President Pro Tempore, member transportation committee

Jim T. Ryan

Jim T. Ryan

Jim T. Ryan covers Cumberland County, manufacturing, distribution, transportation and logistics. Have a tip or question for him? Email him at jimr@cpbj.com. Follow him on Twitter, @JimTRyanCPBJ.

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