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Who pays? Lawmaker seeks to reapportion infrastructure costs associated with new development

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Aaron Kaufer doesn't claim to have the answer, but he believes Pennsylvania has a problem with infrastructure costs associated with development in growing areas.

The problem, according to the Republican state representative from Luzerne County, is a so-called practice known as “fair share” or “last-man in.”

The issue typically crops up when a new project is proposed in an area that has seen a lot of growth: Officials see the new project as generating traffic that could overwhelm current roadways and bridges.

That last developer in is then saddled with millions of dollars to improve intersections or widen bridges and roadways to handle the increased traffic from all of the development in an area.

“To ask a private developer to improve one intersection that benefits everyone and would encourage more development detracts from future economic growth,” said Kaufer, who is seeking co-sponsors to back a legislative fix to the problem.

Kaufer has floated the idea of redistributing costs for development-driven improvements to state roads. The proposal calls for developers to pay 20 percent of the infrastructure-improvement cost, rather than the entire tab, with the state Department of Transportation expected to pick up the rest.

“My goal is to start the conversation,” he said. He is hoping to advance a bill in the new legislative session and is open to feedback. “I am not saying this has to be the solution.”

Dan Durden, CEO of the Pennsylvania Builders Association, said his association is generally in favor of Kaufer’s efforts to look at the issue on a statewide level. But, he added, the legislation is still just a concept.

“Where it goes may change our mind,” he said. “I think it’s a problem, but whose fair share is it to pay and how do we get there?”

Early reaction

In a statement, PennDOT said it will review Kaufer’s proposal once it’s been introduced. But spokesman Rich Kirkpatrick also said PennDOT can’t afford 80 percent of the costs.

“Adding 80 percent of the costs of such development-triggered upgrade work to PennDOT’s responsibility would further strain PennDOT’s ability to manage the nearly 40,000-mile state-maintained road system, the nation’s fifth largest,” he said. 

Regional planners, engineers and trade officials that represent builders, meanwhile, had mixed reactions.

“Any growing area has faced this issue over time,” said Steve Deck, executive director of the Tri-County Regional Planning Commission, which oversees planning efforts in Dauphin County.

The current planning code does not provide very effective tools for addressing infrastructure needs associated with development, he said.

Local officials in booming municipalities have turned to new fees – such as transportation impact fees imposed on developers applying for building permits – to supplement what the municipalities collect from property taxes.

Silver Spring Township in Cumberland County adopted a transportation impact fee at the end of 2017 as a way to require developers to pay their “fair share.” Some real estate professionals expressed concern that the additional cost of the one-time fee might stifle future development.

But Kirk Stoner, planning director for Cumberland County, said developers know what they will pay upfront in municipalities that levy impact fees. The fees are reflect the level of traffic an individual project is expected generate.

Andrew Kenworthy, COO of Herbert Rowland & Grubic Inc., a Swatara Township-based civil engineering firm, works with many local and county governments across Pennsylvania. He said an impact fee is just one tool for growing municipalities to consider.

Kenworthy believes better planning by municipalities could help them prioritize and budget for infrastructure upgrades, which could avoid or limit the problem identified by Kaufer.

But PennDOT and local governments can’t always identify when or where every development will happen, which means some developers still may have to pay for costly infrastructure improvements around their projects.

“When a road is built, no one has a crystal ball what is going to happen in 20, 40 or even 100 years,” said Dave Black, president and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corp. “Route 322 has been around forever. Who ever could have foreseen the development between Harrisburg and Hershey, for instance?”

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Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin and Cumberland counties. Have a tip or question for him? Email him at jscott@cpbj.com. Follow him on Twitter, @JScottJournal.

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