I-80 Toll Denial

I received an email from the PSBA regarding the recent denial of the I-80 Toll.

Governor calls special session to address transportation funding

This week Gov. Edward Rendell said he will call a special session of the General Assembly to address transportation funding following the federal government's recent decision to again deny Pennsylvania's application to toll Interstate 80.

Act 44 of 2007 called for the tolling of I-80 and additional revenue from the Pennsylvania Turnpike to provide funding for road and bridge repairs and for public transit agencies across the state. However, the U.S. Department of Transportation in rejecting the application said that plan would violate federal law that requires money from tolls to be used only for the roadway that is being tolled, not on transportation initiatives statewide.

Rendell had included projected revenue from I-80 tolls in his 2010-11 state budget proposal, and without it said the state now faces a $472 million gap in transportation funding.

"We have to deal with the fallout of this decision; there is no way that we can just do nothing," Rendell said. "I'm going to call a special session of the legislature to address our transportation challenges. We'll look at every option on the table. This is a dire situation with significant consequences."

A factor to consider is how this gap will impact the 2010-11 state budget for all programs, including education. A date for the special legislative session has not yet been set.

There is now a large hole in the State budget. Add declining state income tax revenues to the mix and we are trying to fill and ever increasing hole in the budget.

Rendell has thus far kept his promise of increasing the basic education subsidy to all districts across the state. Mt Lebanon is scheduled to receive a 2% increase in its subsidy this year. The 2009-2010 Basic Education Subsidy provided to Mt Lebanon was $5,584,093. Right now we are budgeting for an increase from that level. The reality is that, right or wrong, the decision to deny the toll road will put much more pressure on the Governor and Legislature to reduce costs elsewhere in the budget.

The denial leaves an additional $472 million hole in the 2010-2011 Commonwealth budget. This does not include the $719.6 million that the State is already missing due to declining tax collections for the entire budget year. From the above link:

Acting Secretary of Revenue C. Daniel Hassell today reported that Pennsylvania collected $3.9 billion in General Fund revenue in March, which was $243 million, or 5.9 percent, less than anticipated. Fiscal year-to-date General Fund collections total $19.9 billion, which is $719.6 million, or 3.5 percent, below estimate.

The Governor is hoping the month of April brings a windfall of tax collections which will help balance the 2009-2010 budget.

Thanks for reading.

James