THE MAYOR'S REPORT: Paying for road work
So how do municipalities in Pennsylvania pay for road reconstruction and maintenance? After all, we have 2,562 boroughs, townships, and cites in Pennsylvania. Stay tuned as I review how repaving and maintenance is funded. Meanwhile ... yes indeed, it’s Sunday afternoon and windy again. I’ve straightened out the U.S. flag on the front porch several times. Not doin’ any front porch sittin’ today, however, but it won’t be long. Take a few minutes and join me as I heat up some coffee. March Madness has begun as Tina and I enjoy college basketball. Duke won Saturday night so Tina is a happy fan. How about those G-A girls basketball players? We are so proud of you all and your winning season.
OK ... how do municipalities fund road, street, and alley projects? With taxes of course, however, what taxes? At the fuel pump we pay a liquid fuels tax while oil companies pass along a franchise tax. Yes ... Pennsylvania has one of the highest liquid fuels tax in the nation, however, Pennsylvania has 25,400 highway bridges being number three in the United States.
The liquid fuels tax is shared by the Pennsylvania Department of Transportation, the state police, rail services, airports, and municipalities, allocated based on populations and miles of roads in the municipal inventory. For example, Greencastle Borough has 15.52 miles of streets. Antrim Township has 110.46 miles of roads. Remember, as I wrote two weeks ago, these miles do not count the PennDOT highways in the respective municipalities.
Greencastle’s 2021 allocation from the fuel tax was $23,854 while Antrim received $121,491. Greencastle usually has to save funds over a two- or three-year period until one street project can be funded. The borough sets aside annual funds for alley repaving as well. $23,854 is not a lot of money, especially given the fact that all costs are rising while the state allocation is decreasing. All 21 boroughs and townships in Franklin County received a total of $1,168,857. Franklin County government also receives funds annually for county bridge maintenance.
Liquid fuels funds expenditures are restricted and municipalities must receive approvals from PennDOT representatives, who assign project numbers. These expenses are then audited the following year to make sure that expenditures were within purchase guidelines and make sure that prevailing wage rates were paid, if applicable. Some maintenance projects do not require that contractors pay prevailing wage scale rates. Our borough managers have done an excellent job in applying and receiving Franklin County CDBG (Community Development Block Grants) for street and handicapped sidewalk projects. South Jefferson street will be the benefactor of CDBG grants in 2022.
So what does future liquid fuels funding look like? Not very good as annual revenues have been decreasing. Why? If you own an electric vehicle, you don’t pay a fuel tax. Folks have been working from home and driving less. COVID has decreased travel. The Pa. Transportation Revenue Options Commission presented their Final Report and Strategic Funding Proposal on July 30, 2021. You can view the 39-page document on line.
So what does it say (read)? 13.5% of the fuel tax goes to municipalities. There is a project deficit of $3.9 billion per year. Funding also goes to freight rail, water ports, aviation, and public transportation. Deferred maintenance costs much more in the end. It’s important to keep good roads and streets good. Reconstruction from the sub-base upward is very expensive. Inflation continues to impact maintenance costs just as it is in our personal lives.
One thing I learned early in my municipal management career ... good roads drive a positive economy. That’s why farmers often served on rural township boards. They wanted decent roads to get commodities to market. Look at I-81 as our example.
The Pa. gas tax funds 78% of road projects while other states' fuel taxes are much lower. New York’s is 18%. To balance and diversify future funding, recommendations includes (1) mileage-based user fees and (2) electric vehicle mileage based user fees. Another discussion is adding toll road fees in corridors where there is high-volume traffic. Another proposal is to eliminate liquid fuels funding for Pa. State Police ($400 million annually) and return the funds for road and bridge improvements. State police would have to be funded by other means. A state police fee has been discussed for about 14 years where townships and boroughs without municipal police would be charged a per capita fee. Municipalities without their own police forces have strongly objected to this proposal.
New or increased fees are proposed as follows: vehicle registration fee increase; electric vehicle fee; vehicle lease fee; vehicle rental fee; ride share fee; aircraft registration fee; goods delivery fee. Vehicle sales tax and value of the vehicles tax may be considered and increased. I presume that means the more expensive the vehicle, the more percentage tax you’ll pay. I’m very concerned about a mileage fee. I saw a report last week that if you drive 12,000 miles a year, you would pay triple compared to what you currently pay with the gasoline fuel tax.
No matter how you think about it, we do need good, safe roads. One way to help save taxpayers is to create fair workers’ prevailing wage rates. How about a county by county prevailing wage rate instead of a regional, urban rate? When municipal roads are in poor condition some municipalities borrow money either conventionally or from the Pa. Infrastructure Bank as an investment to improve their roads and streets. Others use larger fund balances (reserve funds) to support these capital road improvement costs.
I close by sharing this. Last week Marie Eshleman visited us and gave me an article written by the late Paul Harvey. Do you remember Paul Harvey on the radio? When we lived along Addison Avenue I worked a lot of nights. I’d wake up at noon and neighbor Arthur Fisher would be sitting on the side porch with the radio on listening to Paul Harvey’s daily commentary. Anyway, Paul Harvey wrote, "What’s mainly wrong with society today is that too many dirt roads have been paved!” Oh my. He went into great facts of how life was much simpler back then with dirt roads. Maybe he had a point when he wrote this: “At the end of the dirt road, the only time we even locked our car was in August, because if we didn’t some neighbor would fill the car up with too much zucchini.” Our porch has been blessed over the years with fresh vegetables from area gardens furnished by the late Roy Lear and a great neighbor like Wayne Tosten. Thanks Marie, Roy and Wayne for sharing.
“Good day!” We are so blessed.