Pennsylvania Creates Ground Rules for Private Public Partnerships

PENNSYLVANIA HOUSE PASSES PRIVATE PUBLIC PARTNERSHIP LEGISLATION

Pennsylvania has joined thirty-three existing states that have passed rules for private-public-partnership agreements. Several years ago under the Rendell administration, there was detailed investigation into leasing the Pennsylvania Turnpike in an attempt to raise revenue for transportation infrastructure improvements. Pennsylvania did not have any specific guidelines for this type of agreement at that time. The legislature did pass Act 44 of 2007 which included an annual increase to the tolls on the Turnpike and the sale of bonds for transportation infrastructure improvements. Now Governor Corbett has signed Act 88 of 2012 which defines how public-private-partnerships can be formulated. The law now creates the ground rules for Pennsylvania to consider private-public-partnerships as another tool for funding are deficient transportation infrastructure.

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Federal Transporation Funding Bill Signed by President

FEDERAL TRANSPORTATION BILL RECEIVES PRESIDENT’S SIGNATURE

On Friday, June 28, 2012 President Obama signed the MAP-21 legislation that Congress approved creating a new program to fund federal highway programs through 2014. Thus ended the streak of extensions to the SAFETYLU legislation which has been extended nine times for a total of over 1000 days. The $118 Billion, 27 month legislation will be in effect until September of 2014. While we should applaud the signing into law of this new legislation, it provides only a portion of the funding actually needed to maintain and improve our transportation infrastructure.

The bill is expected to boost job creation, however, the transportation bill was the most contested part of the package. Prominent conservative groups urged Republicans to vote against it, while the U.S. Chamber of Congress pushed for passage. Some believe that the bill represents excessive government spending while others consider it an investment that will pay great dividends.

The final bill does not include language that would require approval of the Keystone XL oil pipeline. House Republicans had pushed for a provision on Keystone, but dropped the demand after winning a concession from Democrats to streamline permitting of transportation projects.

The highway portion of the bill authorizes spending of about $120 billion through 2014, and funds most of that by extending various fuel and highway taxes. But because those taxes don’t fully cover planned spending, the bill raises new revenues from companies by making changes to the way corporate pensions are calculated and by increasing premiums paid to the Pension Benefit Guaranty Corporation.

The scope of the new transportation legislation has been reduced since the last time Congress approved a multi-year highway bill. The last bill, which was signed into law in 2005 by former President George W. Bush, lasted four years and spent $244 billion on road and transit projects.

The Greater Lehigh Valley Chamber of Commerce’s policy on transportation infrastructure funding supports a strong relationship between user fees and the true cost of repairing, maintaining, and expanding our transportation systems. Passage of the bill is great news but only takes us part of the way to the finish line. Inflation continues to increase the cost of maintenance, construction, and operational activities and yet we have not increased user fees in any significant amount.