4-State Call- PA, NJ, 12/16/09

Transit Revenue Call: PA, NJ, 12/16/09

Attendance

Jacob Riger - Charlier Associates

Grant Ervin - 10,000 Friends of PA

Rebecca Alper - NJPIRG

Jay Corbalis - NJ Future

Erica Spaid- Greater OH

Kevin Doyle - LCC

Elisa, Rayla - SGA

Pennsylvania

In Pennsylvania, Act 44 which was created a couple of years ago currently governs transit funding. This act came out of a year-long study and provided three recommendations for transit funding in PA, a robust option, a mid-level option, and a less robust option (the actual option they chose was somewhere between the less robust and mid-level option).
Act 44 also included a 25% increase in tolling of the current turnpike system, with provisions for options of leasing or privatizing the turnpike and potentially tolling I-80. Neither of these went through, but the PA partners are currently waiting to hear back about whether or not the tolling of I-80 will be federally approved.
There is also a provision for a portion of the state sales tax to be used for transit, as well as a portion of the lottery fund.
The State General Fund contributes revenue to operating costs as well as new capital expenditure.
If the tolling of I-80 does not go through, this will put a $450 million dollar gap in the whole transportation program. This will mean that PA transit will have less than a quarter of the resources needed.
In terms of potential mechanisms for this campaign, if the I-80 tolling doesn’t go through this would present the opportunity to explore new avenues and maybe look into increasing the gas tax or vehicle registration fee. Congestion pricing might also be an option.
In Allegany county they have been able to implement a local drink tax.
In terms of needs, it depends based on what region you are looking at. Some regions have major operating concerns, while others face challenges with capital expenditures. Some have both.

New Jersey

In NJ the capital expenditures are funded through the Transportation Trust Fund. The state contribution to this is approximately 1.6 billion. The TTF is funded primarily by the gas tax, which is one of the lowest in the country. Currently the money goes to bonding out capital dollars. At some point next year, all of that money will go to service debt which has already been issued, at which point they will need to raise an additional 1.6 billion each year to move forward.
NJ Transit operations are supported by general appropriations by the state, which are insufficient, so in recent years money has been taken from the Transportation Trust Fund (which is typically used for capital) and put toward operations.
People are talking about how to address this issue. Tri-State and NJ future have been building a coalition and talking about a solution which includes extending the sales tax in NJ to cover gasoline. They are also resigned to a modest fare hike. They would like the tolled interstates in NJ to adopt variable rate tolls similar to congestion pricing. They are also interested in tolling new roads if PA’s tolling of I-80 is approved.
They are looking at other vehicle fees.
They have also been exploring the option of merging the tolling administration with the DOT. They haven’t done the research yet in terms of what could be saved, but they know the political hurdles might be quite high.
They are also proposing that the tolling administration give a certain amount its revenues to the TTF like it used to.

Questions/Discussion:

Is there more information on whether or not the Obama administration might approve more tolling.

In PA they have heard mixed things about this.
After talking to Oberstar, they know that the possibility of tolling is generally looked at in an unfavorable light among legislators because allowing it in certain circumstances would make everyone want the option.

From a national perspective, is the tolling option something that could actually feasibly be approved?

Elisa doesn’t know very much about this but recommends talking to someone on the T4 campaign.

Elisa: How are recent or future governors’ races influencing the decisions you are making?

In NJ, the newly elected governor campaigned with a promise not to raise the gas tax. This hasn’t materially effected their position because the projected shortfall hasn’t changed. Most politicians are at least privately conceding that a gas tax increase will likely have to be part of the solution, so the governor’s position presents some challenges.
The governor in NJ also stated at the same time that he doesn’t want to issue more debt. Without this, he would need to raise 1.6 billion in new revenue, which is essentially impossible given his position. A gas tax increase will probably end up being the solution, despite what he’s said.
In PA they have a 2010 election cycle coming up. Most of the candidates are just starting to do their rounds and meet with organizations. Part of the challenge will involve pushing the public to understand that these revenues are needed to support the necessary public infrastructure.

Did SGA do any work on the Virginia governors race?

SGA didn’t work directly on this but our partner, the Coalition for Smarter Growth, watched the race closely.

Elisa: How does the urban/rural divide play into your thought process and decisions?

In PA it’s a pretty stark contrast, and this has become really apparent with the I-80 issue since the interstate goes through very rural areas.
In NJ this is largely a dynamic that they don’t have to deal with. Rural areas aren’t that big and their transit system extends through most of the state. Transit is so prevalent in New Jersey that even Republicans see the importance of transit in terms of driving the economy. This isn’t to say that there aren’t other issues, but in terms of the rural/urban, republican/democrat divide it’s not a big problem.
Ohio will get back to everybody about where they stand on this, but they know that they will have to present this issue to republicans as something relevant, which will be challenging.

Ohio: If the money from I-80 were used to leverage transit in Ohio, it would need to be transit near the interstate itself because people want the benefits from the tolling to be distributed directly to the individuals paying the toll. Is this something that is coming up in Pennsylvania?

The free rider problem in PA can be a huge depending on where you live in the state, because in certain areas you drive essentially for free. If the counties in the southern portion of PA wanted to change this they probably could, but it would make them politically unpopular among their rural counterparts.
‘Logical’ arguments can be made about why the tolling wouldn’t be unfair, but these arguments tread on some of the prevailing ideologies in the region (freeways are meant to be ‘free’, etc.) and on deeply imbedded animosities between the rural and urban areas.