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Transportation Revenue Continues to Lag

April 7, 2009

Despite some recent glimmers of hope in the stock markets, Pennsylvania’s revenue collections – including funds earmarked for highway construction – continue to lag behind projections.

March receipts in the Motor License Fund were $184.1 million, $14 million below estimate. Fiscal year-to-date collections for the fund total $1.9 billion, which is $109 million, or 5.5 percent, below estimate.

Without the federal stimulus money, PennDOT’s budget for this construction season would be about $1.8 billion, some $400 million less than last year. Pennsylvania will receive slightly more than $1 billion for highway projects as a result of the stimulus package.

PHIA Managing Director Jason Wagner noted that while the stimulus funds will enable Pennsylvania to address a number of much-needed bridge-repair and resurfacing projects this year, future highway funding remains extremely uncertain.

The federal transportation funding measure is up for renewal this year. U.S. House Transportation and Infrastructure Chairman Jim Oberstar recently noted that Pennsylvania stands to lose more than $750 million in annual revenues in 2010 should congress fail to solve the Highway Trust Fund deficit.

Additionally, the rejection last year of the Interstate 80 tolling plan will mean a reduction of $300 million in Pennsylvania highway funding in the 2010-11 fiscal year. Renewing the federal funding measure will not fill the gap left by the rejection of the tolling plan.

“The stimulus package is not nearly enough to solve the problem,” Wagner said. “Construction companies and suppliers simply aren’t investing as much as they normally would in equipment and people, and they won’t until they see a stable source of funding in the future. The sooner the funding issues are addressed, the greater the potential for the economic stimulus to gain traction and continue.”

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