Infrastructure Investment Doesn’t Require Growing Government
Nearly everyone agrees infrastructure is vital to the success of an economy. And while most infrastructure is provided by the private sector, the government does play a role. This is where the disagreements begin.
Candidates for office discuss the need to “invest in infrastructure” in seemingly every election. But does this worthy goal require raising taxes and growing government? No, especially in Pennsylvania, which has the highest gas tax in the country.
Policymakers can tackle the commonwealth's infrastructure challenges and save taxpayers money. Here's how:
1. Utilize surpluses in The Public Transportation Fund and Multimodal Transportation Fund.
These two transportation funds have huge cash reserves that should be tapped before raising taxes to grow the state’s transportation budget, which is projected to exceed $8 billion this fiscal year (see page B4).
2. Repeal the Prevailing Wage Act.
The Prevailing Wage Act mandates governments pay an artificially-inflated wage to individuals working on government construction projects with a price tag of more than $25,000. This special-interest giveaway forces taxpayers to pay more for public projects when compared to similar projects financed by the private sector.
Additionally, the prevailing wage mandate leads to postponed roadway repair projects and is found to be one of the most burdensome mandates for local governments.
3. Explore leasing the Pennsylvania Turnpike to a private operator.
The Pennsylvania Turnpike Commission has raised tolls on drivers for the past 10 years—a trend likely to continue until 2044. Yet, due to Act 44 of 2007, a portion of this revenue will be redirected away from Turnpike maintenance and improvements and to mass transit agencies.
Although much has changed in 10 years—including the Turnpike’s debt burden—policymakers should still explore the viability of a Turnpike lease. When this issue was debated in 2008, a lease could have raised an estimated $12.8 billion for the state and provided a return that would have exceeded annual revenues from Act 44.
4. Stimulate private sector infrastructure investment.
As mentioned above, the private sector plays a critical part in infrastructure development. Pennsylvania lawmakers can stimulate private infrastructure investment by reducing the state’s onerous tax burden and repealing burdensome regulations. The time, effort, and resources used to comply with the state’s regulations and tax laws could be better spent by businesses on investment that will boost job growth and wages for working people throughout Pennsylvania.
The commonwealth’s infrastructure must be maintained and added to where neccessary. Lawmakers can accomplish these goals by employing commonsense strategies to meet infrastructure needs and shield Pennsylvanians from higher taxes.