(The following story by Jere Downs and John Sullivan appeared on the Philadelphia Inquirer website on January 14.)
PHILADELPHIA — With little more than five weeks before SEPTA threatens to raise fares and slash service, Sen. Vince Fumo proposed a plan yesterday that would increase the real estate sales tax to boost transit funding.
The Philadelphia Democrat’s bill would raise the state portion of the realty transfer tax by one-half percent, fetching an estimated $200 million annually for struggling transit agencies.
The bill comes closer to fixing chronically inadequate state transit funding than a $110 million motor-vehicle-fee package backed by Gov. Rendell and proposed by Rep. Dwight Evans (D., Phila.). Transit agencies have lobbied for $282 million in additional state funding annually.
Some Republicans from the GOP-controlled House and Senate said the proposal could be part of the transit solution. But they repeated their demands that a statewide fix for transit also address insufficient state aid for roads and bridges.
“We need to look at the overall transportation problem,” Sen. Robert Thompson (R., Chester.) said.
Still, Thompson said he intended to sign on as a co-sponsor of Fumo’s bill. The Fumo plan “fixes the transit side. It is a good idea.”
State roads and bridges are underfunded, too, Steve Miskin, spokesman for House Majority Leader Sam Smith (R., Jefferson) said yesterday.
“You cannot fix transportation piecemeal. We will look at it. But it needs to be part of an overall, comprehensive transportation plan.”
The state legislature has historically raised gasoline taxes to mend roads and bridges when it also raises fees to help state transit agencies. This two-pronged approach has succeeded in drawing support from rural and urban legislators.
But Kate Philips, a spokeswoman for Gov. Rendell, said “the door is shut on a gasoline tax increase.”
“Gas prices are just too volatile right now,” she said. “The governor wants to keep the focus on transit because that is the crisis we are facing.”
She also said that Rendell is reviewing Fumo’s proposal.
The statewide real estate transfer tax is 1 percent, matched by an additional 1 percent or more levied by many local municipalities across the state, Fumo’s spokesman, Gary Tuma, said yesterday. The total real estate transfer tax in Philadelphia is 4 percent, and 3 percent in Pittsburgh.
“It increases with inflation because it grows as the value of real estate grows,” Fumo said in a news release yesterday. “We have an opportunity to solve this problem for many years to come.”
As a statewide tax to save transit, the real estate transfer tax makes sense because more income would be generated from urban areas where more properties are sold each year, Fumo said. His news release said that about half of state revenue from the real estate transfer tax is derived from Philadelphia and its four suburban counties. Pittsburgh, where the Port Authority of Allegheny County has threatened similar transit cuts and fare increases, is the sixth-largest contributor to state real estate transfer tax revenue.
“There are some positives to it, such as the fact that the six counties who rely on mass transit the most would be the largest contributors,” said Erik Arneson, chief of staff to Senate Majority Leader David J. Brightbill (R., Berks). “But we are very concerned about the prospect of making it more difficult to buy a home.”
Beginning Feb. 27, SEPTA is on course to raise the cost of a token from $1.30 to $2, the cash fare from $2 to $3 and pare 20 percent of its service to fill a $62 million budget deficit.
SEPTA officials were buoyed yesterday by the Fumo announcement and a morning rally of labor, business and civic groups aligning themselves under a new banner known as the Pennsylvania Transit Coalition.
“We are very pleased that a lot of the political rhetoric seems to be disappearing and the people who really need to address this issue are taking it seriously,” SEPTA spokesman Richard Maloney said yesterday.
The Pennsylvania Transit Coalition, organized by Pat Eiding, president of the Philadelphia Council AFL-CIO, was officially launched with a meeting of about 100 people representing some three dozen organizations.
“A statewide coalition this diverse cannot be ignored,” Eiding said of the group composed of representatives from prominent labor organizations, the Sierra Club, senior advocacy groups, religious nonprofits, and political and community associations.
“We are talking about the economic well-being of our city and region,” former Gov. Mark Schweiker, who is president of the Greater Philadelphia Chamber of Commerce, told the group at the AFL-CIO headquarters on 22d Street. “It cannot be said that the downsizing of SEPTA aid is an enlightened economic-development strategy. It is the anti-economic development strategy.”