Retail gasoline prices have fallen to the lowest levels in more than five years, and many are wondering whether this drop will negatively affect the revenue available from the recent enactment of Act 89, PA’s most significant comprehensive transportation funding law since 1997.
The answer is no…but here’s why.
Act 89 did not change the fact that Pennsylvania’s highways are still funded by a user-pay system. Fuel taxes on gasoline and diesel remain the cornerstone of this user pay system. However, only about 11 percent of the actual price of a gallon of gasoline is determined by federal and state taxes. The vast majority is dependent upon the market price of crude oil.
The authors of Act 89 were wise in that they protected the state revenues derived by Act 89 and by effectively freezing the calculation rate used to determine that state tax level. Prior to Act 89, a large portion of the state tax rate was dependent upon a calculation of the average wholesale price of gasoline and then was run through a formula. An artificial cap was placed on this calculation formula in the mid 1980’s. This is the main reason Pennsylvania’s highway funds became stagnate because the cap was reached in the early 2000’s. Read more
Act 89 continues to push construction lettings to significantly higher levels compared to last year. In November, PennDOT put out over $60 million in projects. This now brings the year-to-date total to $2.46 billion. At this same point in 2013, PennDOT only bid $1.571 billion in lettings. PennDOT has already exceeding its initial 2014 estimate of $2.2 billion. It was reported earlier that PennDOT’s 2015 anticipated lettings will again be $2.6 billion.
With the recent enactment of the transportation funding bill there is reason to see this trend continue in 2015. Act 89, which will implement a $2.3 billion comprehensive transportation funding plan over the next five years, will result in PennDOT exceeding $2 billion in construction lettings in 2015. PennDOT finished 2013 with $1.6 billion in lettings.
As in year’s past, PHIA will continue to track contract lettings on a monthly basis.
To view the full November letting report and year comparisons, click the link below.
*The report lists the total contracts awarded at each letting date, a comparison to the same period in the previous calendar year, and letting adjustments made since the previous month. PHIA staff will track PennDOT lettings throughout the year and provide monthly update.
Correspondent Steve Croft selected Pittsburgh and its bridges as a backdrop in a segment that aired on Sunday. He also traveled to Philadelphia to interview former Gov. Ed Rendell on what could have been a disaster with an Interstate 95 bridge, were it not for the quest for a sausage sandwich.
“Although Pennsylvania has earned a reputation for having considerable transportation system problems, we’re now better off than nearly any other state following the passage of Act 89 a year ago,” said PHIA Managing Director Jason Wagner. “That doesn’t mean our problem is solved, and the 60 Minutes segment pointed out that the lack of consensus at the federal level continues.”
The segment, along with two additional segments on the issue that were not aired, may be viewed here.
At the annual meeting of the Associated Pennsylvania Constructors (APC), PennDOT presented a recap of the 2014 highway construction program and made a projections for 2015. With a little over a month to go, PennDOT is expected to let approximately $2.6 billion in highway projects. The department has already eclipsed $2.4 billion as of Nov. 24. PennDOT anticipates maintaining its strong project output as a result of Act 89. They foreceasted 2015’s lettings to total at least $2.4 billion. The number could be pushed higher with project put out for bid via the Commonwealth’s Public-Private Partnership Law. While these numbers are projections, PennDOT has routinely met or exceeding these number in past year. To view the full 2015 construction forecast click HERE.
Act 89 continues to push construction lettings to significantly higher levels compared to last year. PennDOT had another strong month with nearly $300 million in projects being put out on the street during the month of October. This now brings the year-to-date total to just over $2.4 billion. At this same point in 2013, PennDOT only bid $1.465 billion in lettings. At this pace, PennDOT will far exceed its initial 2014 estimate of $2.2 billion.
With the recent enactment of the transportation funding bill there is reason to see this trend continue in 2015. Act 89, which will implement a $2.3 billion comprehensive transportation funding plan over the next five years, will result in PennDOT exceeding $2 billion in construction lettings in 2015. PennDOT finished 2013 with $1.6 billion in lettings. Read more
Among the solutions for improving highways is one that requires relatively little investment and no new construction. PennDOT Secretary Barry Schoch, appearing on Pennsylvania Newsmakers this week, outlined the department’s “Green Light Go” program and joined Associated Pennsylvania Constructors’ Bob Latham to provide a progress report on Act 89, the transportation funding measure that passed nearly one year ago.
“There’s no better low-cost improvement to reduce congestion and improve safety than to upgrade traffic signals,” the secretary said. To view the entire segment, click here.
PennDOT’s continuing effort to highlight the benefits of Act 89, the transportation funding bill, received a boost from Gov. Tom Corbett this week in a high-profile news event in Pittsburgh.
With the Birmingham Bridge serving as a backdrop, the governor made the point that the funding bill will benefit people in every corner of Pennsylvania. The Birmingham Bridge itself will undergo $28.5 million in repairs after an incident in 2008 that closed the bridge for a month when the bridge deck dropped due to deterioration.
Funding from Act 89 accelerated the timetable to repair the bridge. The act will raise $2.3 billion per year in additional transportation revenue by 2018, supporting tens of thousands of jobs.
So far, PennDOT has started work on more than 200 Act 89-funded projects covering more than 1,600 miles of roads and 83 bridges. Overall, more than 900 projects are expected to get underway this year, both from Act 89 and prior funding streams.
To view the entire news release, click here.
The State Transportation Commission today updated Pennsylvania’s 12-Year Transportation Program with a 50 percent boost in transportation spending directly attributable to passage of Act 89 last fall.
The new plan anticipates $63.2 billion being available over the next 12 years for improvements to roads, bridges, transit systems, airports and railroads, compared with $41.6 billion in the last update two years ago.
“Today’s action represents a significant step forward to addressing all transportation modes,” Governor Corbett said in announcing the action. “Act 89 provides a solution to a decades old problem, and the legislature and I showed that unlike Washington, we are able to put partisan politics aside and do what’s right for Pennsylvania.”
The program, which takes effect Oct. 1, anticipates $12.3 billion being available for highway and bridge projects in the first four years. Public transit is in line for $7.9 billion; aviation, $370 million; the state’s rail-freight systems $228 million; and the newly created multimodal fund will receive $284 million in the first four years.
State law requires the commission to review and update the 12-Year Program every two years. No capital project can move forward unless it is included in the 12-Year Program.
Some of the key projects funded by Act 89 and included in the updated 12-Year Program are:
- Continuation of the four-lane US 322 from the top of Seven Mountains to west of Potters Mills in Centre County.
- Construction of the long-awaited expansion of the Conchester (U.S. 322) Highway between Route 1 and Interstate 95 in Delaware County.
- The initial steps to lay the groundwork for the Interstate 83 master plan expansion through Harrisburg.
- The initial steps leading to the widening of U.S. 22 in the Lehigh Valley.
- Start of design work for the 13-mile long Central Susquehanna Valley Thruway in Snyder, Union and Northumberland counties.
More information about the 12-Year Program Update is available by clicking HERE.