Motorists frustrated with high gas prices should be on the alert- your pain at the pump could get worse, and it has nothing to do with Middle East tensions or gas company profits.

Sadly, many in the transportation industry and some lawmakers in Pennsylvania believe the only way to fix our roads is to increase gasoline taxes and charge drivers more in vehicle fees. This low-octane loser is surely another wrong exit for taxpayers whose tank is already on empty.

To be certain, Pennsylvania’s roads and bridges need repair. But before taking one more dollar from working men and women through higher prices at the gas pump, lawmakers must do a better job spending the billions in taxes and fees they already get.

Gov. Corbett’s Transportation Funding Advisory Commission proposed uncapping the oil franchise tax- bumping up gas prices by an estimated 10 cents or more per gallon- while also increasing vehicle and license fees. Advocates for more transportation taxes and fees claim Pennsylvania, due to the lack of transportation funds, has the most structurally deficient bridges in the nation and some of the worst roads in the country.

While Pennsylvania’s roads and bridges may indeed be poor, there is simply no shortage of transportation dollars. U.S. Census and Federal Highway Administration data shows Pennsylvania spends more than $61,000 per highway mile, the seventh-highest road spending in the country. State highway spending exceeds $588 per person, more than 41 other states. And, state transportation spending has risen by more than 127 percent since 1995. The bottom line: Funds are available, but they’re not being spent well.

Pennsylvania’s fiscal house is already facing a four-alarm fire with the state’s spending crisis, and transportation must be considered in the context of all state spending. Fixing roads and bridges is a fundamental government responsibility, but many other state programs are not.

How can any legislator look taxpayers in the eye and demand they pay more at the pump each month to fix failing bridges, while state government hands out billions of dollars in subsidies for sport stadiums, corporate headquarters and “green jobs”? Redirecting state borrowing for corporate welfare to transportation would make better use of taxpayers’ dollars.

There are more ways to sure up funding for roads and bridges that won’t empty the wallets of Pennsylvania drivers. Currently, the cost of state-funded construction projects ballooned by tens of millions of dollars due to archaic mandates that force private employers to pay workers inflated wages, increasing labor costs upward of 30 percent for the same quality of work. Redefining prevailing wage rates on state-funded construction projects can free up funding that could be used on other badly needed projects.

Moreover, transportation projects, like all government appropriations, must be prioritized. Beautification, streetscaping, bike trails, parking garages, and new maintenance buildings might garner applause and photo ops for politicians, but they eat up funding that could be used for vital repairs. Every dollar spent on unnecessary aesthetics is one dollar that cannot be spent fixing our more than 5,000 deficient bridges.

Furthermore, Pennsylvania has the opportunity to bring private sector expertise and financing to transportation. Public-private partnerships, which the commission supported, are contractual agreements between a government agency and a private entity to build or manage a project. These partnerships minimize costs and maximize accountability as private contractors put their own capital on the line while government retains ownership and oversight.

Lawmakers should also stop sending turnpike toll money to mass transit systems in Philadelphia and Pittsburgh that most Pennsylvanians don’t even use. Mass transit must rely on user fees, not taxpayer subsidies, freeing up turnpike revenue to repair the roads motorists are paying to drive on.

Ultimately, gas prices have already taken a financial toll on Pennsylvania drivers. Before taking more out of the wallets of drivers and taxpayers, lawmakers must prioritize the billions of dollars we spend today and protect our investment in transportation. Otherwise, Pennsylvania taxpayers will be out of gas along with patience for business-as-usual overspending.

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Jonathan Humma is a research fellow and Nathan A. Benefield is director of policy analysis with the Commonwealth Foundation (www.commonwealthfoundation.org), Pennsylvania’s free-market think tank.

Following through on his word to balance the budget without raising taxes has been a challenging task for Governor Corbett. His administration has made tough decisions on government spending and there are more difficult decisions ahead. Balancing the public ledger has been accompanied with budget cuts which provoked discontent amongst many Pennsylvanians. While such necessary cuts has left many Keystone residents dissatisfied, the Commonwealth will produce a second sustainable budget. Unfortunately, there is a looming threat that lies ahead in the arena of skyrocketing state pension contributions. Lawmakers recently met with the Public Employees Retirement Commission. The commission’s grave testimonies made it abundantly clear that there must be attention focused on pensions in order to minimize the eminent day of reckoning.

Between state and public school employees, there is an unfunded liability of more than $40 billion which is more than 150% larger than the entire General Fund. The current budget appropriates more than $1 billion towards pension obligations. This is an increase of more than $300 million from last year. The state contributions are expected to rise 600% in merely six years to a total of $4.2 billion. The immense increase in pensions in the budget is certain to undermine the budgeting process for years to come. Lawmakers will be forced to substantially increases taxes or continue to make spending cuts. The retirement commission estimates that it will take more than 30 years to fund all the liabilities.

Unfortunately, this forthcoming pension crisis was self-imposed. Just a decade ago, the Public School Employees Retirement System (PSERS) was actually running in a surplus. During this time, the General Assembly passed 50% benefit increases for themselves, 25% increases for other state employees and a 25% increase for those already retired. In addition to boosting benefits, lawmakers voted to postpone making proper payments to the retirement plans in 2003 hoping that the fund would experience a rapid growth over the course of the next decade. However, the Great Recession caused a 30% collapse in the market value of the retirement funds. Coupled with the many years of underfunding, Pennsylvania is now faced with a fiscal nightmare as courts have ruled that it is not permissible to retroactively adjust benefits.

The introduction of a defined-contribution plan instead of the current defined-benefit plan is a vital component to recovery. Richard Dreyfuss, business and actuary scholar, emphasizes that defined-contribution plans boast several benefits in comparison to the current disastrous plan. In contrast to the unfunded liabilities accrued by pensions, defined-contributions’ annual government payments are the final cost. Benefits remain stable as a percentage of the employee’s payroll rather than rapidly increasing state costs to cover increasing liabilities and decreased investment returns. Not only do defined-contribution plans provide stable budgeting, but they also prevent manipulation by politicians who want to increase benefits while deferring the costs to the future. The defined-contribution plan is a pay-as-you-go system in which benefit increases require sufficient funding. This plan provides an important safeguard to taxpayers as costs are straightforward and not unfairly bestowed upon future taxpayers.

Pennsylvania’s pension obligations are growing at unsustainable levels and require immediate action from the General Assembly. The nature of pension plan politics has been to increase benefits while deferring costs into the future. The future has now caught up with the present. The Commonwealth must institute a retirement plan that is both fiscally responsible and fair to taxpayers.

Jonathan Humma blogs at Keystone Liberty: Limited government and free markets for a prosperous Pennsylvania.

Like PennDOT, the Pennsylvania Turnpike is yet another government agency that is experiencing a worsening financial situation. The Turnpike Commission has been attributing their financial woes to declining revenues and increasing costs. Despite increased tolls, Moody’s credit rating agency foresees an ongoing struggle for the turnpike. A Republican representative is now advocating for the allocation of Marcellus Shale natural gas taxes to ease the toll road’s funding burden of nearly half a billion dollars in state transportation funding. While this may offer a short-term increase in funds, the underlying problems associated with the turnpike commission remain. A superior policy alternative would be to lease the turnpike.

Despite tolls being raised by 20 percent in 2009, the Pennsylvania Turnpike has still lost$2.4 billion. In 2012, the commission has ordered another 10 percent increase in an attempt to balance the budget. The turnpike’s debt has escalated by more than 180 percent, or $5 billion, since 2007. The additional debt will be accompanied by more than $11 billion in interest payments over the course of the next several decades. This will place a significant burden on taxpayers. The turnpike commission is exacerbating Pennsylvania’s state of fiscal instability. The history of the Pennsylvania Turnpike Commission has been rifled with deficits, toll hikes, labor strikes, and corruption.

Unfortunately for Pennsylvanians, lawmakers continue to support the Turnpike Commission and all of its failures. A Republican representative is calling for natural gas taxes to be utilized to alleviate the turnpike’s funding of statewide transportation. This proposal is a common big government maneuver in which one program or revenue stream is utilized to fund another program. While the turnpike tolls are designed at funding the state roadway, its tolls on motorists are being directed to state transportation and mass transit. This is similar to immense alcohol markups by the PLCB that supplement the general fund instead of strictly financing law enforcement and regulation of the industry. Directing natural gas taxes towards state transportation initiatives is a similar ploy. These revenues should be earmarked solely for environmental regulation of the industry.

There is an alternative to the billions of debt and makeshift attempts by politicians geared toward raising new revenues on industries to fund troubled programs. Leasing the turnpike will flush the state with cash while improving the roadway for Pennsylvania motorists. If the Commonwealth would have proceeded with the lease agreement suggested by the Rendell administration, Pennsylvania would have received nearly $12 billion upfront and accrued a billion dollars in interest annually. In the leasing contracts, the state would have the autonomy to control toll hikes, receive payment for state police coverage and no longer be responsible for maintenance costs.

The Pennsylvania Turnpike continues to be a burden to taxpayers. The government owned roadway accrues billions of dollars in debt for taxpayers while continually raising tolls on motorists. Siphoning of funds from Marcellus Shale to turnpike commitments is only a short-term fix that maintains the status-quo. The Republican majority must take the lead and release the turnpike in order to turn the roadway form a costly liability to a profitable asset.

Concerned Pennsylvanians are well aware that PennDOT is facing a multibillion dollar shortfall. Whether it is the state’s several thousand structurally deficient bridges or the more than occasional potholes, state rankings continually cite the Commonwealth amongst those having the worst roads in the nation. Democrats proclaim that PennDOT’s dilemma stems from a lack of revenues are therefore advocating for increased fees and gasoline taxes. However, the facts reveal that the Keystone state is amongst the highest in the nation when studying spending per road miles and gasoline taxes. There are solutions to the transportation crisis that will more efficiently allocate transportation dollars. One such proposal is prevailing wage law reform.

CF President Matt Brouillette explains that the origin of prevailing wage laws dates back to the 1930s. It was an effective measure designed to keep construction wages high in order to protect white workers from competitively cheap black labor. While many states have repealed their prevailing wage laws, Pennsylvania continues this practice which is responsible for increased labor costs of more than 30 percent. The annual price tag for prevailing wage is approximately $1 billion. The increased costs associated with prevailing wage negatively impact state transportation funding, local government and school board budgets.

Towards the end of 2011, Rep. John Bear and his colleagues on the Labor and Industry committee introduced several bills to reform Pennsylvania’s costly and antiquated prevailing wage. The GOP lawmakers believe that the new legislation will free up funding for additional public projects and more efficiently use taxpayer money. To date, the package of reforms has yet to reach the governor’s desk. As legislative attention is becoming increasingly focused on transportation issues, it is quite possible that after 50 years, the prevailing wage may finally be amended in 2012.

PA Independent’s recent story on the resurgence of the prevailing wage debate was met with opposition from PA AFL-CIO President Rick Bloomingdale. He claims that the proposed changes in prevailing wages will negatively impact union construction laborers by reducing wages and ultimately will affect the communities in which they live. While Bloomingdale’s claims have merit, he does not address the consequences or burden that the increased taxes required to fund the salaries of construction workers will have on the majority of Pennsylvanians. While many citizens are losing jobs or being forced to accept pay cuts, the prevailing wage law guarantees construction worker’s salaries of 20% to 30% above that of comparable jobs in the private sector.

Reforming or eliminating Pennsylvania’s costly prevailing wage laws are an important start in addressing PennDOT’s funding gap and spending problem. Prevailing wage laws are proving to be too costly and are adversely affecting the ability to repair the state’s infrastructure. The laws are out of touch with the majority of Pennsylvanians who have experienced large pay cuts and loss of employment. At a time when families are struggling to make ends meet, taxpayers can simply not afford to support artificially high wages associated with the public sector labor union. Moving in the direction of competitive private wages will free up the resources needed for more projects and additional hires in construction throughout Pennsylvania.

Jonathan Humma of Lancaster County is an American University economics student and blogs at http://keystoneliberty.org

As a follow up to a year-end press release which summarized 2011 as a “GOP Failure”, House Democrats continue to criticize Gov. Corbett and the GOP for failed leadership. This time, Democrats announced their initiative to take the lead in Pennsylvania’s transportation and infrastructure crisis. The Governor’s transportation advisory committee reported back with their findings in August 2011. As Republicans have put Pennsylvania’s infrastructure needs on the back burner of the legislative agenda, the Democrats are rightfully placing increased emphasis on transportation. However, their leadership fails to appropriately address the Keystone state’s growing infrastructure demands.

Both Democrats and the transportation advisory committee conclude that the Pennsylvania Department of Transportation is faced with a multibillion dollar budget gap. They claim that the correlation between increased fuel efficiency standards which result in decreased fuel tax revenues to be at the forefront of a revenue problem. Another facet of blame for a widening budget gap is inflation and increasing Pennsylvania State Police costs. According to the advisory commitee’s projections, PennDOT will face more than a $7 billion funding gap by 2020. This will further deprive the state of sorely needed construction and reparation projects.

While Democrats and the advisory committee should be commended for reviewing tens of millions of dollars in savings through modernization and efficiency, the overwhelming majority of their proposals include raising billions of dollars in increased fees and higher gasoline taxes. Another controversial move by Democrats is to utilize turnpike revenue to fund mass transit. This move is in opposition to a user-fee policy. Turnpike motorists will be paying for a form of transportation they choose to avoid. The Democratic plan for PennDOT is business as usual in Harrisburg as politicians choose to raise revenues and leave important reforms off the table.

In order to truly confront the infrastructure crisis in Pennsylvania, lawmakers must recognize the core of the problem is overspending;  not lack of revenues. The Commonwealth’s spending per road mile is ranked higher than nearly all other states. Additionally, gasoline taxes are amongst the highest in the nation. Pennsylvanians deserve more for the current funding. This can only be achieved through fundamental reforms. There are a plethora of policy options from which to choose that will give Pennsylvanians more for their tax dollars. These policies include the end of pork barrel transportation projects, reforming or eliminating prevailing wage laws, and enabling public-private partnerships for the Pennsylvania Turnpike and mass transit. Implementing such reforms will free up the necessary resources to rebuild Pennsylvania’s deteriorating infrastructure.

Pennsylvania’s widening transportation funding gap merits the attention of all lawmakers. For a proper solution it must be recognized that the dismal state of affairs is the result of a spending problem, not revenues. The status-quo is no longer acceptable as there are several ways to make real positive changes that will create more jobs through more construction projects with the same level of funding. Pennsylvania must invest wisely and be an efficient steward of taxpayer money as a practice of good governance while paving the roadways towards the future.

Jonathan Humma is an economics student at American University and a blogger at http://keystoneliberty.org

Before adjourning for Christmas recess, Democratic leaders issued a press release lambasting Gov. Corbett and the Republican legislature for their “extreme ideological crusade” and “no leadership on jobs.” The scathing critique included overtones of commonplace class warfare rhetoric accusing Republicans of attacking workers’ rights and the middle-class. Representative Dermody, D-Allegheny, went as far as saying that Republicans made Pennsylvania’s job climate worse coupled with failures in transportation and Marcellus Shale tax policy.

Despite Democratic claims, Republicans accomplished several achievements for Pennsylvania’s job climate. The Corbett budget reduced spending and did not raise taxes. The Corbett administration no longer had federal stimulus funds and made substantial cuts. An end to the state’s runaway government spending brought tax stability for job creators and Pennsylvanians. In order to successfully curb Pennsylvania’s onerous tax burden, Republicans passed legislation to reduce loopholes in school district property tax hikes without voter referendum. Republicans refrained from imposing large Marcellus Shale taxes which will keep the industry booming. According to Democratic philosophy, taking action on jobs equates to more government spending. In stark contrast, Republicans are trying to keep spending and taxes low so that the private sector can prosper.

Senator Hughes, D-Philadelphia, asserts that budget cuts are “reverse investments at a time when we should be investing more in our roads, bridges, mass transit, and our workers.” Governor Corbett’s transportation report in August agreed that the state of Pennsylvania’s infrastructure is deteriorating. Third party state rankings report that Pennsylvania’s roadways and bridges are amongst the worst in the nation despite being at the top of the leader board in roadway spending per mile. Additionally, fuel taxes, which fund the roadways, are amongst the highest in the nation. Instead of raising fuel taxes which increase the burden for Pennsylvanians at the pump, there must be reforms dedicated toward getting more value for the current funding. Senate Republicans passed SB 344 which established more public-private partnerships in transportation. More efficient infrastructure spending means more projects, more jobs, and better roadways.

Lastly, state Democrats protested against the Republican’s impact fee on Marcellus Shale natural gas drilling. Democratic leaders contend that the tax on drilling companies is not high enough for companies to “pay their fair share.” Democratic legislators criticize Pennsylvania for having the lowest tax on natural gas drillers in the nation. For many Democrats, the economic boom associated with the natural gas industry equates to more revenue for government spending. Republicans must proactively highlight the billions of dollars in capital investments, royalties given to local landowners, and taxes generated from the industry. The industry is successfully providing jobs and cheap energy to Pennsylvanians. Taxing the industry will ultimately reduce its investment and growth potential, and impose higher energy costs on already struggling consumers.

Democrats continue to lash out at GOP leadership in an effort to score political points and defer blame of the stagnant, faltering economy. Republicans must keep focused and press forward to reduce the growth of government, provide tax relief, and create a business friendly climate for job creation.

Jonathan Humma blogs at http://keystoneliberty.org