News: Philadelphia: Gas-tax rise may help save SEPTA

Philadelphia - Gov. Rendell might round up an unsuspecting group to ride to the rescue of the region's buses and trains: people who drive cars.

Rendell could help close SEPTA's $62 million deficit with the help of an automatic tax increase that will result in Pennsylvania's having the second-highest state gas tax in the nation, behind Rhode Island.

On Jan. 1, Pennsylvania's wholesale oil-franchise tax, believed to be the only one of its kind in the country, will spurt from 14 cents to 18 cents a gallon - a 30 percent increase. The state gasoline tax remains 12 cents per gallon.

And motorists might encounter bumpier rides.

While this tax revenue would not flow directly to transit systems in the state, it could be used to free up federal highway funds that could provide direct transit aid.

Republican House and Senate leaders have urged Rendell to transfer some of that highway money to transit, a move that would not require legislative approval.

Under such a move, Rendell could use $190 million in highway funds between now and July 1, 2006. The Pennsylvania Department of Transportation would then obtain most of the money lost to road projects with the $133 million gained from the oil-franchise tax.

The rest of the transferred money would have to be offset by eliminating $57 million in road projects throughout the state by July 1, 2006.

Roads in the Philadelphia area could take a big hit. Transportation officials here fear that up to $24 million in road projects in Southeastern Pennsylvania would be spiked and $38 million in projects would be delayed for the fiscal year ending June 30.

It would be a tradeoff that Rendell has said he prefers to avoid. But without action by the legislature, this approach appears to be his only choice. What else he could do remains unclear, and if he has another strategy, he is not saying.

"It's a terrible idea," Rendell said yesterday at a news conference at the state capitol in Harrisburg. "There should be a dedicated funding stream for transit in place."

The prospect of such a solution seems unlikely this year. Tuesday is the official end of the legislature's two-year session.

"We have no intention of coming back next week," said Erik Arneson, chief of staff for Senate Majority Leader David J. Brightbill (R., Lebanon).

"Time marches on," SEPTA spokesman Richard Maloney said yesterday.

It remained unclear how much aid SEPTA or other transit agencies could receive.

SEPTA is confronting a $62 million gap in its $920 million fiscal 2005 budget, which expires June 30. Unless the state acts, the SEPTA board said it would meet Dec. 2 to consider a 25 percent fare increase and end weekend service as a way to help close that shortfall. This week, SEPTA sent layoff notices to 400 employees.

Pittsburgh's transit agency plans to mend its $30 million budget gap by raising fares 25 percent in February and eliminating weekend service by March.

Under the state constitution, any tax revenue derived from the sale of gasoline can be spent only for roads. But states routinely "flex" highway funds for use by transit agencies. For example, New Jersey's Department of Transportation gave NJ Transit $75 million in federal highway funds this year.

"While the practice is legal, it is... just bad public policy," said Matt Stanton, a partner at MBI GluckShaw, a New Jersey-based transportation consulting firm. "Transit properties around the country have become addicted to the use of capital funds to cover operating expenses. Just like heroin, the more you use, the more intense the addiction becomes."

Still, transit advocates yesterday welcomed the prospect of relief from anywhere.

"If it's true, we may have something to be thankful for this week," said Marc Stier, an organizer of the Philadelphia Transit Campaign, a grassroots lobbying group.

The region's motorists might feel differently. The Delaware Valley Regional Planning Commission would have to examine the region's $400 million annual road budget to advise Rendell what to cut to help make up the difference that revenues from the gas-tax revenues would not.

A prime target could be $6 million budgeted for a new Route 202 bypass in Bucks and Montgomery Counties, local officials fear.

"He is taking away highway projects from the people I represent to solve a disaster," State Rep. Eugene McGill (R., Montgomery) said yesterday. "It is within his purview to do it. I think it is despicable. He doesn't have the guts to save the SEPTA problem."

State Rep. Dwight Evans (D., Phila.) lamented yesterday that Republicans had failed to back his plan to raise motor-vehicle fees.

The gas-tax money that could be used to partially cover the use of the highway funds would come from an obscure levy known as the Oil Company Franchise Tax. It is based on wholesale gas prices averaged out for the 12-month period that ended Sept. 30.

Road Projects Facing Cutbacks

Shifting some federal highway funds to aid SEPTA could result in the delay or elimination of some area road projects. Here is a partial list of projects in the region that transportation officials say could be affected.

$6 million, purchase of right of way for a new Route 202 bypass between Doylestown and Montgomeryville; project already on hold.

$3.2 million, turn lane and improvements to Route 413, Middletown, Bucks County.

$3 million, citywide paving contracts, Philadelphia.

$2.7 million, reconstruction of Route 263 in Warminster, Bucks County.

$2 million, reconstruction of Swanson Street between Oregon and Snyder Avenues, Philadelphia.

$2 million, study and partial reconstruction of Route 1 interchange at Route 352, Delaware County.

$1.7 million, intersection improvements to Oxford Valley Road at Route 1, Langhorne, Bucks County.

$1.4 million, improvements to Route 313, Bucks County.

$1.2 million, design of new I-95 interchange with Route 322, Delaware County.

$1.1 million, extension of Bristol Road in Chalfont, Bucks County.

$1 million, reconstruction of Bells Mill Road between Germantown and Stenton Avenues, Philadelphia.

Source: Delaware Valley Regional Planning Commission, transportation improvement program.