Act 89, also known as the Transportation Bill, was signed into law in 2013 to fund road projects, bridge repairs, and public transit.
Seeking a better understanding of Pennsylvania’s issues and proposed solutions? Sometimes, complicated jargon and concepts can get in the way. That’s why we started Explainers, a series that tries to lay out key facts, clarify concepts and demystify jargon. Today’s topic: Act 89
Act 89, also known as the Transportation Bill, was signed into law in 2013 by Governor Tom Corbett (R) to fund road projects, bridge repairs, and public transit. Transportation funding has already begun to ramp up and by 2018 the state will have an additional $2.3 billion per year, making it the biggest increase in transportation infrastructure funding in decades.
Infrastructure in Pennsylvania has long been on the decline; the American Society of Civil Engineers, in its 2014 infrastructure report card, said the commonwealth has the highest percentage of structurally deficient bridges in the country. A structurally deficient bridge has one or more major component that’s deteriorating, but is still safe to use. Roads in the state aren’t faring much better; 57 percent of Pennsylvania’s roads are in poor or mediocre condition.
What will it fund?
The money will go towards state and local roads and bridges, public transportation, and turnpike expansion projects. Act 89 also establishes a multi-modal fund, which covers ports and waterways, freight and passenger rail, aviation, transit, and bicycle and pedestrian projects. The dedicated multi-modal funding stream can be used for everything from train stations to bicycle paths, things that in the past received special funding out of general funds. According to the Pennsylvania Department of Transportation, it “promotes coordinated planning and implementation to ensure greatest return on investment.”
Where will the money come from?
Funding for transportation projects has often lagged behind needs and the lack of dedicated funding streams made it difficult to plan, something Act 89 begins to address. The law also switches up the formula for generating revenue. Act 89 eliminated the $0.12/gallon state retail gas and diesel tax, but raised how much can be collected by the Oil Company Franchise Tax (OCFT), a wholesale tax on gasoline and diesel distributors. The wholesale price of fuels the OCFT could be applied to has been capped at $1.25 since 1983, though the current wholesale price for gasoline is more than double that. The cap will be lifted in phases and will be completely eliminated in 2017. Wholesalers can pass on their increased tax burden to retailers and ultimately drivers could end up paying the difference. Although average gas prices grew following the first cap increase, today gas prices are lower than they were before the bump. While removing the cap will definitely generate more money for the state, exactly how much it will affect consumers isn’t clear yet. One estimate says for a driver who puts 12,000 miles per year on a vehicle averaging 24 miles per gallon the additional cost will be about $48 higher this year than last.
The new law also increases vehicle registration and driver licensing fees over the next several years. These initial fee hikes will be followed by biennial increases tied to inflation. Car registration, motorcycle registration, and licensing fees will rise by $1 for the next two years before being pegged to inflation. Pickup truck registration fees will rise by $1.50 in 2015-2016 and by $2 in 2017-2018. Some increases are steeper. For example, replacement driver’s license fees went from $5 to $19 and vanity plates went from $20 to $76.
Additionally, some traffic violation fines are rising. Failure to obey traffic control devices now costs drivers $150 instead of $25. Other moving violation surcharges increased by 50 percent.
Did this article answer all your questions about Pennsylvania’s Act 89 ? If not, you can reach Irina Zhorov via email at firstname.lastname@example.org or through social media @zhorovir. Have a topic on which you’d like us to do an Explainer? Let us know in the comment section below, or on Twitter @PaCrossroads.