Rendell stalls on oil tax, turnpike

Proposals to fund road work, transit lifeless as budget deadline gets closer

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HARRISBURG -- With slightly more than two months to go before the June 30 budget deadline, Gov. Ed Rendell has made virtually no progress in persuading state legislators to adopt his plans to generate additional funds to fix state roads and to bail out deficit-plagued mass transit agencies.

Asked about the governor's plan to raise $760 million a year for transit by slapping a 6.17 percent tax on oil company profits, House Republican leader Sam Smith said, "It's dead."

Mr. Smith, of Punxsutawney, leads the 101-member GOP caucus, but he also said the Rendell oil tax hasn't garnered much support in the 102-member Democratic caucus either. In fact, said Smith aide Steve Miskin, no legislator from either party has even stepped forward to introduce an oil tax bill.

Erik Arneson, a spokesman for Senate Republican leader Dominic Pileggi, said, "Every reliable expert thinks there is no way to prevent oil companies from passing on that tax" to motorists in the form of higher gasoline prices. "That makes its prospects very dim indeed."

Mr. Rendell's other idea -- leasing the Pennsylvania Turnpike to a private operator -- also is stalled. The governor estimates that could generate at least $965 million a year for 30 years or more.

The governor would use that money to fix 6,000 state bridges and 9,000 miles of highways that state Transportation Secretary Allen Biehler said yesterday are "in poor condition."

The politically powerful Pennsylvania Turnpike Commission has hired influential law firms and financial advisers, as well as a Harrisburg public relations firm and lobbyist Michael Long, longtime aide to ex-Republican Senate leader Bob Jubelirer, to defeat Mr. Rendell's leasing plan.

Mr. Rendell has said he'd like a bill to lease the turnpike approved by mid-June, but that doesn't seem likely. So far he has refused to make public the details of any of the 48 "expressions of interest" he's received from private companies that would pay billions of dollars upfront and then take over operation of the turnpike -- including setting higher tolls -- for at least 30 years.

"As long as the governor continues to hide the expressions of interest, it's hard to see how that idea gains any support," Mr. Arneson said.

Mr. Biehler insisted yesterday he hasn't given up on either plan, but admitted, "we have some tough challenges ahead."

Measures to provide road and bridge funding and additional aid for mass transit don't absolutely have to be adopted by June 30, but if they aren't, legislators would have to cancel their summer vacations and return to the Capitol in July and perhaps even August, something they aren't keen on doing.

Transit agencies in Pittsburgh and Philadelphia, with their thousands of daily riders, say they can't wait much longer to get some word from the state about additional funding.

The Port Authority of Allegheny County was facing an $80 million deficit, but by cutting routes and laying off 267 people by late June, it has trimmed the red ink to $50 million. Even more route cuts will come in September, and higher fares in January, if state aid isn't forthcoming.

The Southeastern Pennsylvania Transportation Authority, or SEPTA, the Philadelphia agency, faces a $129 million deficit.

Mr. Smith said the state already provides about $900 million a year for mass transit, which makes up more than 60 percent of the budgets for the Port Authority and SEPTA, so it's hard to get legislators to vote for even more aid.

Mr. Rendell has said that if legislators don't like his funding plans, they should come up with ones of their own. Some legislators reply that the governor should scrap his unacceptable plans now and come back to them with proposals they can approve.

Mr. Miskin said that another reason the Rendell oil tax proposal is bad is that it will apply not just to big oil companies but also to small heating oil dealers, which could raise the price of home heating oil. "Many of our members are waiting for the governor to get serious about this funding crisis" and propose something that legislators can accept, Mr. Miskin said.

But Mr. Biehler said, "So far we haven't drafted any [alternate] options."

He did say that the administration's lawyers still are working on the oil tax plan, and disputed the claim that its costs automatically would be passed on to motorists.

As to the turnpike leasing plan, he said more will be known by mid-May, when the governor's financial adviser on that deal, Morgan Stanley of New York City, outlines specifics on how it could work and how much money the state could get.


Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.


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