Audit: Pa. missed out on $4B for roads

Auditor general claims money was diverted to state police operations

HARRISBURG -- State Auditor General Eugene DePasquale reports more than $4 billion has been diverted in recent years from road and bridge projects to pay for state police operations

A special performance audit of PennDOT focused on the money from the state's Motor License Fund used to help pay for state police.

DePasquale claimed those transfers have totaled more than $4.25 billion since the 2012-13 fiscal year.

However, that figure appears to be inflated because at least some MLF dollars for state police were for transportation safety, which has always been deemed to be an appropriate use of MLF funding. Prior to the time period of the audit -- Fiscal Year 2012-13 to FY2016-17 -- at least $500 million was diverted annually from the MLF for state police (it was $570 million in FY2011-12).

The new audit notes that comparing the current funding situation to a scenario in which the diversions had been capped at $500 million, PennDOT lost a cumulative total of $876.2 million from FY2013-14 through FY2016-17.

Lawmakers have implemented policy to slowly reduce -- by 4 percent annually -- the diverted amount of funding to get back to $500 million annually.

The appropriation in the governor's 2019-20 state budget is $737.6 million, down from the 2016-17 high-water mark of $802.9 million.

The audit also mentions that in 2011, then Gov. Tom Corbett's Transportation Funding Advisory Com­mission issued a final report including recommendations to either cap the PSP diversion, or implement the same cap and phase-in a reduction of that cap by $300 million, with the General Fund assuming the eventual

$300 million funding burden.

Even if the second recommendation had been implemented as part of the Act 89 of 2013 transportation funding law, the capped diversion amount would not have been $500 million and phase-in would only now be to the point where the PSP diversion to the MLF is reduced by the full $300 million. According to the TFAC report, that means PennDOT missed out on, at best, a cumulative $659 million during the past five years due to uncapped and unreduced MLF transfers to the PSP

So it appears PennDOT, realistically, may have lost out on $659 million to $876.2 million. That's a far cry from several billion, however, $100 million to $200 million extra each of the last five years would, nevertheless, have been helpful for road and bridge maintenance.

DePasquale also questioned how Pennsylvania could have so many roads and bridges in need of maintenance even though those in the state are paying the highest gasoline tax in the nation. But, according to the Commonwealth Found­ation, a conservative-leaning Harrisburg think tank, he didn't bother to find the real answers to his question.

Instead of focusing on the PSP transfer, foundation com­­munications director John Bouder said DePas­quale should have looked at other recipients of those gas tax dollars.

"Due to Act 89, a whopping $1 billion dollars annually in charges to drivers are being sent to mass transit systems," wrote Bouder in an email. "This includes $450 million from Turnpike tolls, along with vehicle registration fees, driver fines, rental and tire fees, and even some of the gas tax. Another $700 million in state taxes fund transit systems."

"Motorists should pay for the cost of the roads they use, but, in this case, drivers are being forced to subsidize mass transit systems -- systems they are choosing not to use," said Bouder.

Bouder also noted that DePasquale should have taken some of the blame for the Pennsylvania Turn­pike's mounting debt -- briefly mentioned in the PennDOT audit, but the focus of an audit released a little over a month ago -- because when DePasquale was a state legislator, he voted in favor of Act 44 of 2007, which required the turnpike to transfer hundreds of millions of dollars annually to PennDOT (totaling more than $6 billion since the 2007 law was enacted), forcing the turnpike to rack up a significant portion of its current debt load, which DePasquale's Turn­pike audit indicated is unsustainable.

DePasquale has said he and other lawmakers at the time thought Act 44 would be a temporary fix and that the state would get permission to toll I-80. That permission never materialized, but the transfers to PennDOT continued anyway, though at a lower amount. The majority of those transfers have been used to fund mass transit systems, not fix roads and bridges.

Additionally, DePasquale, when he was a legislator, opposed the idea of a long-term lease deal involving the Turnpike and a private company to generate as much a $12 billion in upfront money that could have been used for roads and bridges, said Bouder. At the time, DePasquale expressed concern about one private entity being in control of such a major infrastructure component, as well as questioned the likelihood a firm could remain financially stable for the entirety of the lease deal; he was also wary of the potential for that private firm to be a foreign company.

And while DePasqaule's new performance audit does look at ways for PennDOT to save money in its construction operations -- such as better monitoring and oversight of projects -- Bouder said it's silent on the policies his organization argues drive up the cost and increase delays of public projects, including prevailing wage mandates, project labor agreements and too many landscaping, beatification and earmarked projects being put ahead of critical road and bridge repairs.