GUV'S WAY IS THE HIGH WAY
TAKING THE ROAD LESS TRAVELED TO FIND SEPTA
AND TRANSIT SOLUTIONS
February 12, 2007
GOV.
RENDELL has offered up two real, fresh solutions
to fix the state's deteriorating roads and
bridges, and pump money into cash-strapped
public transit systems: Lease the turnpike, and
change the system the state uses to tax oil
companies.
We stress "real" because any solution that
would have required Pennsylvanians to dig into
their own pockets, especially in light of
Rendell's proposed sales-tax increase, would
have been wishful thinking, and dead on arrival
in the state House and Senate.
And we say "fresh" because the governor's
recommendations, especially the tax change on
oil companies, reflect much-needed
outside-the-box thinking, and echoes the message
of change Harrisburg needs to hear - and heed.
With our new, reform-minded Legislature - OK,
forget for a minute the $3.7 million in bonus
pay some legislative aides received in the past
two years, and the 139-count indictment of Sen.
Vince Fumo - perhaps Rendell's $1.7 billion
package will become a reality. But timing is
everything.
This is a big week for transportation. Allen
D. Biehler, state Transportation secretary, is
scheduled to meet with SEPTA officials this
week.
This is a big week for SEPTA, too. The
transit agency, which faces a $140 million
shortfall, will present two scenarios to its
budget committee: (1) if it gets the state
funding, and (2) if it doesn't.
We guarantee you, scenario No. 2 will not be
pretty.
But the governor's package of dedicated
funding could go far to end SEPTA's annual
tortured budget drama.
Leasing the Pennsylvania Turnpike to a
private company, in return for a huge cash
infusion, is not unprecedented. Last year,
Statewide Mobility Partners, a joint venture
between Cintra Concesiones de Infraestructuras
de Transporte SA of Spain and
Macquarie
Infrastructure Group of Australia, paid Indiana
$3.8 billion for a 75-year lease of the
Indiana
Toll Road. In 2005, the same two groups signed a
99-year lease for Chicago Skyway toll road,
giving the city a $1.83 billion boost.
There's no lack of interest for 420 miles of
Pennsylvania's toll road, even though Rendell
hopes to get $965 million a year for it. But the
devil will be in the details, like the setting
of present limits on toll increases and the fate
of PennDOT workers.
In Indiana's case, workers were offered a
chance to stay with the new owners or be placed
in other state jobs. Most chose to stay.
But it is the new way of taxing oil companies
that do business in Pennsylvania, called
"combined reporting," that shows Rendell's
really ringing the bell. In effect, he has
merged his environmental sentiments with
transportation needs.
For years, retail chain stores and other
businesses used an accounting practice that
helped them duck out from paying their full
share on state tax revenue. According to
Newrules.org, a site that encourages community
building, between 1979 and 2000 total state tax
revenue contributed by corporate income tax fell
from 10.2 percent to 6.3 percent.
With combined reporting, the oil companies
must combine the profits from all their
subsidiaries before determining what part would
be subjected to a 6.17 percent tax in
Pennsylvania. Those companies would not be
subject to the old 9.99 percent Corporate Net
Income Tax. And so far, combined reporting has
withstood court challenges.
Both of these ideas need enabling
legislation. If this truly is a reform-minded
Legislature, its members will see to it that
they are quickly introduced and acted upon.
Philadelphia Daily News