(The following story by Amy Worden, Mario F. Cattabiani and Thomas Fitzgerald appeared on the Philadelphia Inquirer website on June 26.)
HARRISBURG, Pa. — Debate raged for five hours last night on a state House plan that would for the first time provide dedicated funding to mass transit and highways through a bond issue, a toll on Interstate 80, and a broad menu of local tax and fee options.
The plan, sponsored by Majority Whip Keith McCall (D., Carbon), generates $700 million – $450 million for roads and bridges and $250 million for mass transit – in new funding, far less than what Gov. Rendell is seeking to fix the perennial transportation funding crisis.
The McCall amendment was narrowly approved, 101-100, last night, but lawmakers still have to consider 45 additional amendments to the transportation funding bill today with a final vote expected tomorrow. The House, under new rules, cut off debate at 11 o’clock last night.
“It’s a good start,” said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee. “In [Rendell’s] first term, in no time did Republicans give us a vote on it. I’ve drawn a line in sand. The governor’s drawn a line in the sand. The Senate will have to deal with it.”
House Republicans criticized the panoply of potential new and increased taxes, and some rural lawmakers said they were angry their constituents would be forced to subsidize urban transportation.
“We deserve a better understanding of where the money is going to be spent,” said House Minority Leader Sam Smith (R., Jefferson).
At a news conference yesterday, Rendell said he would not sign a state budget unless it contained at least $1 billion this coming fiscal year in new mass transit and highway funding.
That’s down from his original proposal of $1.7 billion – a figure he said was needed to repair failing bridges and highways across the state and to bail out struggling mass transit agencies, such as SEPTA.
“It’s inadequate. It’s not going to solve the problem,” said Rendell. “What we do here on transportation and mass transit has to solve this problem for the long run.”
The new fiscal year begins Sunday.
In previous years, transportation spending was provided for only in the general budget.
SEPTA faces the prospect of steep fare hikes and service cuts without $100 million in additional state money, transit agency officials said.
The House Democrats funding plan emerged as the governor said last week he would drop his original transportation plan: to lease the Pennsylvania Turnpike to a private company and impose a tax on oil company profits.
Under the proposed House plan, local governments would have to chip in more than they do now. For mass transit, counties and municipalities would have to increase over four years their share of mass-transit funding to a statewide average of 20 percent of the cost, up from the average 13 percent that they pay now.
The proposal would give the local governments power to impose new taxes.
Counties could levy: a sales, use and hotel occupancy tax of 0.25 percent or 0.5 percent; a room rental tax of up to 1 percent of the price of the room; a car-rental tax of up to $2 a day.
Municipalities could impose an earned income tax of either 0.25 percent or 0.5 percent – or a car rental tax of up to $2 a day.
Some lawmakers feared the impact to tourism and others from rural areas objected to having their communities to support urban transit.
“Why make people in rural areas subsidize mass transit in cities?” said Rep. Jess Stairs (R., Fayette).
The McCall plan also would authorize a study of the feasibility of placing tolls on Interstate 95 and change the turnpike and SEPTA boards’ composition.
It calls for eventually adding funding for “new initiatives,” potentially including the Schuylkill Valley Metro between Philadelphia and Reading; connecting Scranton to Hoboken, N.J., and the Navy Yard subway extension project in Philadelphia.
Also yesterday, in an concession to Republicans, Rendell said he has abandoned his plan to raise the state sales tax to cover gaps in the general fund and reduce property tax bills.
At a news conference, Rendell said higher-than-expected revenues, totaling $500 million, alleviated the need for a broad-based tax increase. Gone, too, is his plan to impose a tax on smokeless tobacco.
In other legislative action, the House approved a plan, first advanced by Rendell last session, to borrow $500 million for research institutions to build and upgrade biotechnology facilities.
The Jonas Salk Legacy Fund proposal would take tobacco-settlement money – about $35 million in the first year – to pay off bonds that would fund the new construction.
“The House’s action today brings Pennsylvania one step closer to being able to attract the nation’s best researchers to the commonwealth’s leading university and bioscience research facilities,” said Rendell.
Critics oppose changing how tobacco settlement funds are used, while supporters say universities that want to continue to receive traditional funding can opt out. Under the bill, half of the existing $70 million a year received by institutions for a variety of research would be diverted to the more narrowly defined Salk program.
“Universities want dedicated research funding that guarantees a stream of money,” said House Republican leader Sam Smith (R., Jefferson). “We are turning off part of that stream.”
The bill now goes to the Republican-controlled Senate where it faces opposition over increased executive control over the funding.