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New local taxes for public transit may be on the way for some Pennsylvania counties

By Anthony Hennen

Public transportation funding has been a growing concern in some cities, and a proposed bill could give some Pennsylvania counties the authority to levy local taxes to support their transit systems.

Rep. Tim Hennessey, R-Chester/Montgomery, introduced HB2366 to grant Allegheny, Bucks, Chester, Delaware, Montgomery and Philadelphia counties the ability to levy taxes “​​for transit and transportation systems and transportation infrastructure.”

The counties could then levy three types of taxes: a tax on real property transfers, a local income tax, and a local sales tax. 

The tax revenue could then be used for grants to local transportation organizations and mass transit agencies, and to fund infrastructure projects such as road and bridge construction (as well as for maintenance and repair costs). The grants could be jointly issued with nearby counties and used as matching funds for infrastructure projects.

The funding “provides our more populated counties with additional options to fund transportation projects of local importance,” Hennessey said.

Public transit in Pennsylvania is generally better-funded than the rest of the country. PennDOT notes that it ranks 4th in the nation for direct support in funding public transportation. About $1.5 billion goes into the public transportation trust fund (16.5% of PennDOT’s annual funding).

At a February Senate Appropriation Committee hearing, Deputy Secretary for Multimodal Transportation Jennie Louwerse noted that the state “is in a good situation with mass transportation.” Extra federal funds for coronavirus relief strengthened budgets. “Transit agencies should not experience a gap in that funding for the next several years,” Louwerse said.

However, those funds will decline in the future. Funding from the Pennsylvania Turnpike, too, will disappear. Future funding problems could develop if legislators do not find a way to replace those funds – especially as declining gas tax revenues squeezes PennDOT.

Local dedicated funding from sales taxes or income taxes may be a new cause for protest, but taxpayers will have to fund those systems somehow. Local accountability may create wiser governance than state-level funds.

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