By Eric Boehm | PA Independent

 

HARRISBURG — The state House is expected to vote Tuesday on a measure allowing the state to lease roads and mass-transit operations to private companies with the goal of raising much-needed revenue for infrastructure improvements.

 

The bill provides a broad framework for authorizing and implementing so-called “public-private partnerships,” or P3, which proponents claim could help the state close a $3.5 billion annual unmet need in transportation funding.

 

In a P3 arrangement, the state would sign a lease agreement with a private firm for up to 99 years to operate and maintain a state-owned transportation asset, which could include everything from highways and bridges to parking garages, mass transit systems, tunnels and airports. The arrangements also could be used for the construction of new infrastructure, in which case the private firm would design, build and operate the facility.

 

The private company would be free to generate revenue through user fees or tolls, and the state would have responsibility to make sure maintenance meets existing standards.

 

State revenue generated from the leases would go into a new fund within the Motor License Fund and would be put toward other state transportation projects.

 

The legislation also would create a seven-member commission to review and approve applications from private firms that sought to enter into partnerships with the state. The Secretary of Transportation would chair the board, which also would include the Secretary of the Budget, a governor appointee, and four legislative appointees.

 

The measure has been hung up by Republican divisions over an amendment that would strip language from the bill requiring prevailing wages for all P3 projects.

 

Prevailing wage laws require that workers’ pay be determined by the average wages and benefits in the largest municipality within the county where the project is being done.

 

The state’s business community is generally supportive of P3 arrangements because of the economic benefits and jobs that could be created, but the prevailing wage provision in this particular proposal has given the Pennsylvania Chamber of Business and Industry pause.

 

“We have real concerns over (the prevailing wage) language being in there,” said Gene Barr, executive director of the organization. “We’re not quite sure what is gained by having that in there.”

 

Barr said prevailing wage laws unnecessarily increase the cost of taxpayer funded projects.

 

Rick Bloomingdale, president of the Pennsylvania AFL-CIO labor union, said the requirement was critical to protecting the interests of workers in any future P3 arrangements.

 

“That’s how you avoid the fly-by-night contractors who come in and try to undercut everyone else,” Bloomingdale said.

 

Bloomingdale said the labor union was pushing for further amendments to the legislation aimed at protecting those who currently work for PennDOT in the P3 legislation.

 

House Republicans are split over the prevailing wage language, forcing the postponement of the vote Monday.

 

State Rep. Rick Geist, R-Blair, chairman of the House Transportation Committee and the lead sponsor of the P3 legislation, said the debate was “much ado about nothing” because almost any potential P3 project in the state would have some federal funding attached to it, forcing federal prevailing wage requirements to kick in. 

 

State Rep. Curt Schroder, R-Chester, also acknowledged the federal requirements, but said he would support an amendment to remove the prevailing wage requirement from H.B. 3.

 

If the Republicans were to have enough support to delete the prevailing wage requirement, they would also need to rely solely on their own numbers to pass the legislation. State Rep. Joseph Markosek, D-Allegheny, said Democrats would be “completely opposed” to removing the provision from the bill.

 

Setting aside the dispute over the prevailing wage requirement, there is bipartisan support for the P3 legislation.

 

State Rep. Eugene Depasquale, D-York, said there was bipartisan support for the P3 legislation, as long as the prevailing wage requirement remained a part of the bill.

 

“I’d want to see some improvements in the bill, but at the end of the day, I want to see the bill move forward,” said Depasquale.

 

Bill Patton, spokesperson for Minority Leader Frank Dermody, D-Allegheny, said Democrats supported the P3 concept only if it was done right. 

 

“Trying to use it as a way to undermine prevailing wage is not a good approach, and House Democrats will strongly oppose an amendment that attacks prevailing wage,” Patton said.

 

Similar P3 legislation has been introduced in the state Senate and is expected to be ready for a final vote within two weeks, according to state Sen. John Rafferty, R-Montgomery, chair of the House Transportation Committee.