By Eric Boehm | PA Independent

 

HARRISBURG — Private funding will be an option on the table as the Pennsylvania Department of Transportation tries to address a $3.5 billion annual shortfall in funding for highway and mass transit projects.

 

Barry Schoch, the state's Secretary of Transportation, said Wednesday partnerships with the private sector to finance transportation projects will be a part of the Corbett administration’s plans for the PennDOT. Such public-private partnerships for highway and bridge projects and mass transit, however, will not solve all the state’s funding issues, he said

 

Schoch said the Corbett administration agreed with the state Transportation Advisory Commission, which last year identified a $3.5 billion annual funding gap for transportation. He said the goal of the administration was to tackle the problem quickly and effectively.

 

“We need to study how to finance it, we don’t need to study the problem anymore,” said Schoch. “It won’t take us long to get a group together to identify the financing options.”

 

One option for financing some major transportation projects will involve public-private partnerships (P3s), in which the state would lease state resources to a private company.

 

The state House is expected to pass a bill allowing public-private partnerships for highway and bridge projects within the next month. The bill would establish a seven-member board consisting of the secretaries of transportation and the budget, four legislative appointees and a representative of the governor’s office to review and approve projects that could be leased to private firms.

 

State Rep. Rick Geist, R-Blair, chairman of the House Transportation Committee, said the proposal will generate several billion in private investment for major highway projects like rebuilding the portion of Interstate 95 through Philadelphia.

 

“It’s the way to go. It’s an alternative to bonding and on a much bigger scale,” said Geist.

 

In a P3 arrangement, the state would lease a highway to a private company for a set number of years, during which time the private company would be responsible for rebuilding and maintaining the highway. The company would make a return on its investment by tolling the highway.

 

Schoch said the use of the partnerships is a “part of the toolbox” in addressing the state’s transportation needs, but would be best used for the construction of new roads or adding capacity to existing highways.

 

State Rep. Joseph Markosek, D-Allegheny, minority chair of the Appropriations Committee, said he supports P3s, but they are not the entire answer.

 

“They are good for what they can do. We can address some problems with them, but ultimately we’re going to have to address new funding mechanisms for transportation,” said Markosek.

 

During his budget address two weeks ago, Gov. Tom Corbett announced the creation of an executive commission to study privatization of some government services, such as the state liquor stores. Corbett on Wednesday declined to say whether the commission would examine privatization for transportation too.

 

The commission has yet to have its first meeting.

 

The state may move toward privatizing mass transit operations — or at least reducing the monopoly control of existing mass transit agencies — in an attempt to save money as well.

 

Corbett has proposed to increase operating funds for the mass transit from $663 million to $687 million, but Schoch said other options will have to be considered.

 

“If you’re a member of the public and you ride the bus, do you really care who operates it? You want to get from point A to point B,” said Schoch.

 

Mass transit operating funds were boosted several times by former Gov. Ed Rendell, who “flexed” transportation funds on multiple occasions in order to provide additional operating money for mass transit systems in Philadelphia and Pittsburgh. In December, he moved $45 million in unused federal transportation funds to prevent cuts in service to the Allegheny Port Authority, which runs the monopolized mass transit system in Pittsburgh

 

Schotch said the administration wants to avoid making those same maneuvers and stressed the importance of a complete funding solution for mass transit and highways.

 

State Rep. Paul Costa, D-Allegheny, doubted whether private mass transit would be effective, but said the state could not continue to increase spending for operations.

 

“I think the state has done more than its share,” said Costa. “They can, they have the ability to raise more revenue to address these cuts, but nobody wants to raise taxes.”

 

Other cost savings could be realized by bringing the Pennsylvania Turnpike Commission and PennDOT closer together and eliminating some redundancies between the agencies, said Schoch. In addition to heading PennDOT, he sits on the Turnpike Commission.

 

“We’re going to break down the barriers to share resources. If there are agreements we need to look at and change, we’re going to do that,” said Schoch.

 

Schoch said proposals to combine the two agencies would be unlikely to succeed because the state would have to take on the turnpike’s $2.8 billion in outstanding debt. The commission has been criticized for having nearly 500 managerial-level positions, many of which are viewed as political patronage. 

 

Carl Defebo, spokesperson for the Turnpike Commission, said the number of managers is considerably lower because the agency classifies some administrative and support staff as managerial personnel, though they are not managers in the traditional sense.