​Overview

For decades, the funding gap between available revenue and Pennsylvania's transportation infrastructure needs has been increasing. Transportation funding, which is largely supported by fuel-based taxes, has been eroded by reduced fuel consumption (due to higher fuel efficiency and electric/hybrid vehicle use) and inflation, which has reduced the buying power of a dollar. State revenue from Pennsylvania’s Motor License Fund, which supports highway and bridge maintenance and improvement projects, has also been shifted to other priorities, further reducing funds available for highways and bridges.

Meanwhile, the need for funding is increasing as Pennsylvania’s population has grown and its transportation infrastructure ages. As the funding shortfall has continued, projects to improve the system have been deferred to fund essential maintenance, primarily on Interstate highways.

Insufficient funding for highways and bridges means that critical projects are delayed or foregone, and it is Pennsylvanians who feel the impacts. Poor highway and bridge conditions result in more time spent driving in congestion, delay, higher vehicle maintenance and fuel costs, and increased emissions. This transportation funding shortfall affects all regions of the state and requires a statewide solution.

What is in the PEL Study?

• Chapter 1 provides a summary of the study purpose and needs and its goals and objectives, and summarizes the outreach process.
• Chapter 2 provides background information on the current sources of PennDOT funding and the expenditure needs that are driving the funding gap.
• Chapter 3 compares the revenues and expenditures and identifies the funding gap.
• Chapter 4 summarizes previous studies that identified and evaluated alternative funding options and identifies the reasonable funding options and early actions that will fund immediate and priority projects.
• Chapter 5 provides greater details on the proposed near- to medium-term funding options—namely, bridge tolling, managed lanes, and congestion pricing.
• Chapter 6 presents near-, medium-, and long-term action plans for addressing the funding gaps.
• Chapter 7 presents a proposed methodology for analyzing impacts on low-income and minority populations from potential funding solutions.
• Chapter 8 presents a framework for considering potential mitigation strategies should a project proposed under the program be found to have adverse environmental impacts.

Key Study Findings:

Major sources of revenues are declining.

• A vast majority of Pennsylvania's transportation funding comes from State and Federal gas taxes. In particular, our highway and bridge program relies on gas taxes for 74 percent of its funding. Gas tax revenues are decreasing, driven in large part by improving vehicle fuel efficiency and increasing use of hybrid and electric vehicles. Such declines are expected to continue and worsen over time.
• The purchasing power of gas taxes has declined substantially because the taxes have not been adjusted for inflation over time. For example, the Federal gas tax has not been increased since 1993.
• The Pennsylvania Turnpike Commission (PTC), an entity separate from PennDOT, currently transfers $450 million per year to PennDOT; by law this amount will be reduced to $50 million per year starting in fiscal year 2022-23 and running through fiscal year 2056-57.
• As a result of declining fuel sales, a reduction of $4.9 billion in state-generated revenue is forecast between 2018 and 2030.
• The COVID-19 pandemic has exacerbated the shortfall in gas tax collection; reductions in travel due to the pandemic have resulted in substantial reductions in collection of fuel taxes and vehicle registration fees. The COVID-19 pandemic presents additional funding uncertainty, as it may affect long-term travel patterns.
  

PennDOT needs are substantial and increasing, resulting in large funding gaps.

• PennDOT owns and maintains 40,000 miles of highways and 25,400 bridges and supports another 80,000 miles of local roads and 6,600 local bridges with funding and inspections.
• A lack of funding means that maintenance is often deferred, resulting in higher costs in the long run.
• The majority of Pennsylvania’s funding needs, and more than 86 percent of PennDOT’s overall funding gap, is related to Pennsylvania’s highway and bridge system.
• Available funding for highways and bridges is currently $6.9 billion per year, while the identified funding need is $15 billion, resulting in a funding shortfall of $8.1 billion. That funding gap is projected to increase another $4.5 billion to $12.6 billion by 2030.
• PennDOT has historically spent between $450 and $500 million per year on the Interstate Highway System, while funding of approximately $1.2 billion annually is required to meet operations and maintenance needs. At these levels, the Interstate Highway System in Pennsylvania is underfunded by approximately 60 percent.
• In addition to funding needs to preserve and maintain existing highways and bridges, projections also include an unmet need of $2.1 billion (as of fiscal year 2020-21) for highway and bridge improvements, including capacity expansion, modernization, and upgrades. This $2.1 billion unmet need for improvements applies primarily to the Interstate system rather than non-Interstate National Highway System routes, and is expected to increase to $3.3 billion over the next 10 years.
  

Not being able to meet our transportation needs has real costs and impacts on Pennsylvanians.

• With insufficient funds, PennDOT often must delay routine maintenance work. Delaying repairs leads to additional costs in the future, with the compounding effects of aging bridges, increasing demand, and increasing construction costs. This means that Pennsylvanians will pay more money for these repairs in the long run.
• Roadways require regular repair and resurfacing work. If PennDOT is unable to effectively complete repairs, it impacts the traveling public. For example, a commuter driving an average of 30 miles per day could spend up to $548 extra each year in vehicle maintenance costs driving on poor-quality pavement.
• Lack of adequate funding may require delaying or foregoing capacity improvement projects that could ease congestion. Not resolving congestion can cause 62 hours of delay per year for commuters in urban areas or approximately 325 million hours of delay per year for all 22 of Pennsylvania’s urban areas.
• Assuming an average fuel price of $2.51 per gallon, congestion translates to an annual cost of up to $65 per commuter in urban areas due to wasted fuel. Statewide, fuel wasted in all urban areas due to congestion costs Pennsylvanians around $348 million per year.
  

Funding Options Considered

PennDOT evaluated a number of potential funding options, including:

• Sales taxes
  
• Personal income tax
• Real estate and property taxes
• Fuel/gas tax increases
  
• Other taxes and fees
• Mileage-based user fee
• Various forms of tolling

Each potential option comes with its own opportunities and challenges in terms of the degree to which it can fill the funding gap, the time needed for implementation, the approvals needed for implementation, and the effects on various stakeholder groups, including the traveling public. PennDOT evaluated these various factors and identified the options that could be advanced in the near term, versus those that would require longer-term coordination and legislative or other authority.

A solution in the near term (2 to 4 years) is essential because we have bridges in critical need of repairs today. Bridges in poor condition require frequent inspections and unexpected repairs that take limited funds away from other maintenance activities. When those repairs cannot be completed in a timely manner due to lack of funds, it can ultimately lead to weight restrictions, lane closures, and capacity restrictions. When lanes of traffic are removed from crucial bridges, traffic congestion can form and travel times can be greatly impacted. Longer travel times cause more than just headaches for drivers; they also lead to additional spending on gas and vehicle maintenance. For truck drivers, these additional costs can have major impacts on state and regional supply chains.

Results of the Analysis

A key part of the PEL Study was to determine funding solutions that could be feasible in the near term (2 to 4 years) to provide needed revenue relief quickly, and to prioritize other potential solutions that could take longer to implement but still may be feasible to help meet the transportation needs over the longer term.

Near-Term/Medium-Term Plan

Based on the analysis, each of the potential funding options has some merit and could be considered as part of PennDOT’s long-term strategy in securing sustainable and dedicated revenue for highways and bridges. However, without action by the legislature and/or others, only (1) bridge tolling and (2) managed lanes could be advanced in the near-term. Federal tolling legislation is in place to allow State DOTs to toll bridges for the purpose of reconstruction or replacement, and Act 88 provides the enabling legislation that permits charging user fees, or tolling, to implement managed lanes. In Pennsylvania, tolling authority requires authorization through the Pennsylvania Public-Private Partnership Board (P3 Board).

Of the potential funding options studied, congestion pricing was identified as a possible medium-term solution. Congestion pricing would require acceptance into a national pilot program for implementation, and it would take time to work through the application process for the pilot program.

Why Tolling?

• Those who use the facility pay for it.
• Provides dedicated funding that is used to construct and maintain the facility from which the toll was collected.
• It helps keep the local and regional transportation funding program from being diverted to the interstate program.
• Toll collection systems already exist in Pennsylvania, lowering the cost of collection.
• PennDOT has the mechanisms in place to implement and collect tolls.
  

Bridge Tolling (Near-Term)

Bridge tolling would collect a toll at select major bridges within the Commonwealth to fund their replacement or rehabilitation and to provide a dedicated source of revenue for their maintenance.

Which Bridges? Major bridges in need of replacement or rehabilitation would be considered for bridge tolling. Major bridges include substantial structures based on physical size, location, and cost to replace or rehabilitate. Structures that are in a condition that warrants timely attention for safety, and those that would experience disruptions and community impacts if weight restrictions or closure were imposed, would be prime candidates.

Managed Lanes (Near-Term)

A managed lane is a lane added to an existing highway where the traffic is regulated by charging a toll to use the new lane and/or by encouraging carpooling or transit use. A managed lane can take the form of either an Express Lane, where all users are charged a toll for use, or a high-occupancy toll lane, which allows high-occupancy vehicles free passage while single-occupancy vehicles are charged a toll.

Which Lanes? Managed lanes work best in corridors with recurring peak-period congestion. In selecting managed lane candidates, PennDOT would consider factors such as the connectivity of the network, congestion levels, travel time, potential for increasing capacity, traffic growth, and physical and geometric conditions of the roadway.

Congestion Pricing (Medium-Term)

Congestion pricing would toll all lanes where regular, recurring, and persistent congestion exists, with the goal of encouraging users to shift their travel patterns to off-peak periods, consolidate trips, carpool, or take alternative modes of transportation.

Which Corridors? Corridors where regular, recurring, and persistent congestion exists would be selected. Therefore, congestion pricing is typically implemented in urban areas. In selecting congestion pricing corridors, PennDOT would consider factors such as congestion levels, travel time, potential for transit or other mode shifts, traffic growth, and financial viability. Other considerations for identifying potential locations include the potential for diversion, the environmental effects of diversion, and the project’s ability to meet congestion reduction and revenue goals.

What about environmental impacts?

Tolling can potentially have two primary impacts on communities:

• Diversion Impacts: Various effects can occur on local communities from vehicles that use alternative routes to avoid the toll. Increased traffic congestion along toll diversion routes has the potential to affect neighborhood character, quality of life, and mobility.
• Financial Impacts: The requirement of paying a toll or managing a toll payment account can create financial burdens.

For specific projects identified as candidates for tolling, a more detailed and refined assessment of community effects would be performed as part of the NEPA process within each individual project’s development phase. In particular, impacts to low-income or minority populations within the communities affected by the toll must be considered. To address potential environmental justice impacts, PennDOT has laid out methodological guidance to be followed during the environmental approval process (see Chapter 7).

If the environmental review of a tolling project indicates the potential for adverse impacts, measures to mitigate those impacts will be evaluated. Chapter 8 presents a framework for evaluating potential mitigation measures that can be effective in avoiding, minimizing, or mitigating impacts from tolling.

Long-Term Plan

This PEL Study identifies a considerable number of potential funding solutions that could be implemented over the medium or long term. These other funding mechanisms would require legislative changes or implementation by third parties. PennDOT will work with elected officials and other transportation partners to examine these other potential solutions.

The Pennsylvania Department of Transportation (PennDOT) has an $8.1 billion (and growing) funding gap between its current funding levels and what it needs to provide a system of highways and bridges in a state of good repair. ^1,2 To fill this funding gap, PennDOT has initiated an alternative funding program called PennDOT Pathways. To support PennDOT Pathways, an Alternative Funding Planning and Environmental Linkages (PEL) Study was undertaken to identify near- and long-term funding solutions for highway and bridge funding.

This PEL Study has been prepared in accordance with 23 United States Code (USC) Section 168 as well as with 23 Code of Federal Regulations (CFR) 450.212. Under these authorities, analyses conducted during planning may be incorporated directly or by reference into subsequent environmental documents prepared in accordance with the National Environmental Policy Act (NEPA), provided that the studies were adequately documented; interested Federal, State, local, and Tribal agencies were involved; a reasonable opportunity for public review and comment on the PEL Study was provided; and the Federal Highway Administration (FHWA) was engaged.

A PEL Study is a flexible tool that can be used to connect the planning process with the environmental process required by NEPA. By considering environmental effects during planning, the analyses conducted for a PEL Study can be readily incorporated in the subsequent NEPA process, promoting efficiency and potentially accelerating project delivery. A PEL study is a collaborative and integrated approach to transportation decision-making that considers benefits and impacts of proposed transportation improvements to the environment, community, and economy during the transportation planning process. Engaging stakeholders in planning also facilitates the incorporation of environmental and community values into transportation decisions.

1.1 Background

For decades, the gap between available funding and transportation infrastructure needs has been increasing. Transportation funding, which is supported largely by gas taxes, has been eroded by reduced fuel consumption (due to higher fuel efficiency and electric vehicle use) and inflation (the reduced buying power of a dollar). State-generated revenue from Pennsylvania's Motor License Fund (MLF) predominantly supports highway and bridge maintenance and improvement projects; however, shifting priorities, including funding the State Police, have further reduced MLF funds available for highways and bridges. Meanwhile, the need for funding is growing as Pennsylvania's transportation infrastructure continues to age, needs more repairs, and requires replacement.

The Commonwealth of Pennsylvania (Commonwealth) has been working hard to make the most of its available revenue and to secure adequate and dedicated funding to continue maintaining roadways and bridges in a state of good repair. For example, PA Act 44 and PA Act 89 raised revenue from the Pennsylvania Turnpike and from gas taxes (respectively) for statewide transportation, and Act 89 increased transportation funding by $2.3 billion per year. This funding has been spent on high-priority programs such as those that reduce the number of poor-condition bridges in the state. Since its passage in 2013, Act 89 has allowed PennDOT to complete nearly 4,000 projects totaling more than $10 billion in value. ³ However, the Commonwealth's transportation funding shortfall persists, and projects to improve the system are being delayed to fund essential maintenance, primarily on Interstate highways. For example, some funds have been shifted away from regional and local modernization and operational improvement projects in order to maintain the aging infrastructure of interstate highways and bridges.

The transportation funding shortfall affects all regions of the state and requires a statewide solution. PennDOT continues to seek solutions to stabilize and raise revenues to address the growing need for investment in infrastructure. Over the past 2 years, many ideas have been proposed and studied by the PA Partnership for Mobility Advisory Council (May 2019 report); these options are discussed in Chapter 4, Potential Funding Options.

To solve this systemic funding gap, PennDOT has initiated PennDOT Pathways. This program will re-imagine transportation funding and identify solutions to secure funding for our future. This PEL Study is the first step in the PennDOT Pathways Program to identify potential funding sources, analyze them, and develop a plan for implementation. PennDOT has developed this PEL Study, with support from FHWA, to review previous funding solutions, evaluate potential near-term and long-term options, and identify a path to stable and dedicated infrastructure funding in the Commonwealth.

1.2 Study Purpose

This section discusses the reasons for preparing this PEL Study and summarizes the purpose and needs that have caused PennDOT to examine alternative means of funding. PennDOT's funding focus is twofold: (1) the overall program funding needs across all functions provided by PennDOT and (2) the largest and most urgent need to support the highway and bridge program. The latter is the focus of this document.

1.2.1 Purpose Statement

The purpose of this PEL Study is to identify the best near- and long-term options to fill the transportation funding gap, to provide adequate revenue for maintaining the Commonwealth's highways and bridges in a state of good repair, and to establish a path forward and a methodology for implementation.

1.2.2 The Need for Revenue

PennDOT Transportation-Wide Funding Need

At current funding levels, PennDOT is unable to meet its total needs across the transportation system. PennDOT's funding gap for transportation infrastructure for all modes (e.g., highway, bridge, transit, rail, air) is approximately $9.3 billion, and over the next 10 years this gap is forecast to grow to $14.5 billion. ⁴

Highway and Bridge Funding Need

Specifically, for the statewide highway and bridge system (the focus of this PEL Study), the funding gap is $8.1 billion (see Exhibit 2) and is forecast to grow by about $500 million per year to $12.6 billion in 2030. This highway and bridge funding gap includes maintenance projects to reach a state of good repair as well as modernization and operational improvement projects such as those that improve safety and operations.

Historically, funds have had to be diverted from modernization and operational improvement projects in the Regional Transportation Improvement Programs (TIPs) to maintain Pennsylvania's roadways and bridges. This is exemplified by Pennsylvania's bridge replacement needs. While Pennsylvania's bridges have different characteristics and varied expected durations of useful service life, the average service life of a bridge in Pennsylvania is approximately 75 to 80 years. Cost-effective repairs are essential to extend the time between bridge replacements. Under current funding, nearly 150 of Pennsylvania's 25,400 existing State-owned bridges are planned to be replaced every year. However, if adequate funding was available, the number of bridges replaced by PennDOT would increase to nearly 400 per year in order to achieve a better state of repair, resulting in lower maintenance costs over the long term. A substantial amount of Pennsylvania's highway and bridge infrastructure was built between the end of World War II and 1980, and as these bridges continue to age, the investment they require continues to grow. Pennsylvania's infrastructure funding gap substantially limits the Commonwealth's ability to meet this need, and the number of annual bridge replacements falls short of what would ideally be undertaken to adequately maintain the system by approximately 250 bridges per year. In addition to maintenance requirements, the remainder of Pennsylvania's funding gap is for operational improvement projects necessary to modernize the system, improve safety, and address congestion.

Without a maintained state of good repair on existing highways and bridges, and with delayed or unrealized improvement projects, it is Pennsylvanians who bear the burden. Poor asset conditions result in more time spent driving in congested conditions, higher vehicle maintenance and fuel costs, and increased emissions. Additionally, delays experienced by freight transportation translate to reduced economic competitiveness and higher prices for Pennsylvanians. These impacts and the costs to Pennsylvanians are discussed in Section 3.4.

Section 1.2.3 Study Goal and Objectives

The goal and objectives of this PEL Study began with PennDOT's vision: "An enhanced quality of life built on transportation excellence."

Building toward this vision requires the financial means to maintain a state of good repair of Pennsylvania's highway and bridges without diverting funds from modernization and operational improvements necessary to improve mobility. Unprecedented revenue shortfalls have created exceptional challenges to achieve this vision for the Commonwealth's 40,000 miles of State highways and the 25,000 State-owned bridges. The goal and objectives of this study include the following:

Goal:

• Provide essential infrastructure investment now and for the future.

Objectives:

• Identify and implement near-term funding solutions.
• Identify and prepare for long-term funding solutions.

To accomplish the goal and objectives, this study:

• Summarizes previous studies that identified and evaluated alternative funding options;
• Identifies reasonable funding options and early actions that will fund immediate, priority highway and bridge projects;
• Provides the foundation for near- and long-term solutions to provide funding and maintain the roadway system in a state of good repair;
• Facilitates incorporation of this PEL Study content into PennDOT's project development process and links to the Statewide Long-Range Transportation Plan (LRTP), Metropolitan Long Range Transportation Plans, Comprehensive Freight Movement Plan, and State Transportation Improvement Program (STIP);
• Presents an environmental justice ⁶ evaluation methodology for tolling projects; and
• Provides an approach and action plan for identifying and implementing a near-term alternative funding program in the Commonwealth and identifies mid- and long-term funding options that may be feasible, but will require additional study.

1.2.4 Stakeholder Outreach

Stakeholders

This PEL Study has been prepared by the PennDOT Central office in conjunction with the PennDOT Districts and FHWA, and in coordination with stakeholders in the PEL Study area. Stakeholders include Pennsylvania residents and the traveling public, Metropolitan Planning Organizations, Rural Planning Organizations, and Federal, State, and Tribal Agencies as detailed below:

• Pennsylvania Residents and the Traveling Public: The traveling public are the users of the Pennsylvania roadway network and include residents, businesses, and out-of-state travelers.
• Metropolitan Planning Organizations (MPOs): MPOs are Federally mandated transportation policy-making organizations with representatives from local government and transportation agencies. They are required in areas with an urban population of more than 50,000 residents.
• Rural Planning Organizations (RPOs): Pennsylvania's RPOs serve a function similar to that of MPOs for the rural areas of the state with fewer than 50,000 residents. Federal law requires States to consult and coordinate with local officials in rural areas; RPOs in Pennsylvania are supported by Federal and State planning funds.
• Federal, State, Local, and Tribal Agencies: Agencies and Federally recognized Tribes with a potential interest in the Pathways Program; 23 CFR 450.212 and 23 USC 168 require coordination with agencies and Tribes.
• PennDOT Central Office: The office that facilitates transportation across the Commonwealth, including the Secretary of Transportation and the Central Office team.
• PennDOT Districts: The offices that identify, program, and deliver projects through planning, design, and construction, as well as maintenance and operations in regions across the Commonwealth. The PennDOT Districts also coordinate with the MPOs/RPOs.
• FHWA: The operating administration of the United States Department of Transportation (USDOT) responsible for stewardship and oversight of the Federally assisted, State-administered Federal highway and bridge program to ensure that Federal laws, regulations, policies, and guidelines are met.

Public Outreach Summary

This section presents a summary of the outreach activities undertaken to obtain input into the PEL Study and the Pathways Program in general. PennDOT reached out to the public via the web site, social media, and e-newsletters. PennDOT provided opportunities for public input on this PEL Study via a public engagement platform on the Pathways Program's website between November 17 and December 17, 2020. In addition, comments during a virtual public meeting held from February 19 to March 23, 2021, included information relevant to the alternative funding options in the PEL Study. The Draft PEL Study was available for formal public comment from April 29 to June 1, 2021.

These engagement opportunities included targeted outreach to low-income and minority populations (see Public Participation Plan). PennDOT convened two Equity in Transportation Working Group meetings (March 10, 2021, and March 31, 2021) and solicited input from low-income and minority populations as part of a statewide focus group panel survey (March 2021). These outreach measures and a summary of the comments received are described below. ⁷

Early Public Engagement

In November 2020, PennDOT launched a website for the Pathways Program to educate the public on the funding gap for highway and bridge transportation needs in the Commonwealth and the potential alternative funding solutions being studied. To obtain meaningful early input from the public regarding potential alternative funding solutions, an online engagement period was held between November 17 and December 17, 2020. The online engagement platform provided a comment form that allowed individuals to submit their comments directly within the platform website and noted other ways in which comments could be submitted, including the Pathways Program email address and hotline number. PennDOT issued a press release and conducted social media and stakeholder outreach to notify as many Pennsylvanians as possible to maximize public participation in the online engagement platform. During the early engagement period, there were:

• 375 Comments
• 5,845 Online Engagement Platform Visits
• 516 Stakeholder Emails
• 30,694 Website Visits
• 1,229 Aggregate Video Plays
• 241,695 Social Impressions

The top five comment topics heard from Pennsylvanians and stakeholders during the early engagement period included:

1. Suggestions to raise additional funds
2. Opposition to tax increases
3. Suggestions that fees should be short-term and committed to roads and bridges
4. Support of tolls
5. Opposition to tolls

Pathways Program Outreach: Major Bridge Public-Private Partnership Initiative

On February 19, 2021, PennDOT began engaging communities, stakeholders, and legislators in the Pathways Program's Major Bridge Public-Private Partnership (MBP3) Initiative and announced nine bridges across the state that were candidates for tolling. This outreach effort had three primary objectives: (1) to continue to educate the public on the funding gap for highway and bridge transportation needs in the Commonwealth and potential alternative funding solutions being studied; (2) to introduce the MBP3 Initiative, the purpose and need for the nine candidate bridges, and bridge tolling as a possible near-term solution in support of closing that funding gap; and (3) to receive meaningful input from the public regarding potential alternative funding solutions throughout the study as it progresses.

The MBP3 outreach program continued use of a central online platform as an integral extension of the Pathways Program website. In addition, individual websites were launched for each of the candidate bridges where the community could express their thoughts and opinions. PennDOT also held virtual meetings with legislators, stakeholder organizations and individuals, and members of the public statewide; sent emails and published social media posts; and issued news releases and media alerts. While not specifically a comment period on the PEL Study, many of the comments received through this outreach were related to the funding gap and potential solutions, and contained relevant suggestions informing this PEL Study.

More than 7,000 comments were received in this engagement period. The most common comment themes were very similar to the comments received specific to the early public engagement described above. The following is a summary of the most common themes from the MBP3 outreach that were relevant to the PEL Study:

• Opposition to tolls
• Opposition to tax increases
• General dissatisfaction, including comments encouraging cutting PennDOT budget/being more efficient
• Financial concerns regarding being able to afford the tolls
• Other suggested means of raising revenue, such as selling bonds and legalizing marijuana and using those tax revenues
• Concerns related to impacts associated with travelers avoiding the bridges (like congestion on alternate routes and lost business from diverted traffic). Some indicated that they will avoid the tolls by diverting to other routes.

Environmental Justice Outreach

The FHWA and Federal Transit Administration (FTA) Statewide Planning and Metropolitan Planning regulations, 23 CFR 450, call for actions to prevent discrimination early in the planning process, which affects long-range planning and project programming at the State and local levels. For this PEL Study, PennDOT solicited input from low-income and minority populations to identify concerns about potential near- and long-term solutions that are being studied to address Pennsylvania's transportation funding gap, including tolling initiatives. As near- and long-term solutions are selected for implementation and specific projects are initiated, environmental justice analyses will be performed at the project level in accordance with Federal and State guidance.

In preparing this PEL Study, PennDOT undertook the following additional outreach activities to specifically engage low-income and minority populations: (1) convened an Equity in Transportation Working Group and (2) conducted an online digital survey using a paid research panel comprised of minority and low-income Pennsylvanians over the age of 18. For more information on the specific environmental justice outreach activities and the results of that outreach, see Section 7.3.2, Project-Level Environmental Justice Analysis.

Agency Outreach

In addition to public outreach, PennDOT conducted outreach with Federal and State resource agencies. PennDOT participated in an Agency Coordination Meeting (ACM) on January 27, 2021. The purpose of the meeting was to present an overview of the Pathways Program and solicit feedback for the PEL Study. The meeting was attended by representatives from a number of Federal and State agencies, including resource agencies, transportation agencies, and regional and metropolitan planning organizations. Issues discussed included bridge tolling and procurement processes, maintenance, schedule, and environmental process. Environmental justice concerns and potential mitigation for low-income travelers were also discussed. In addition to the ACM, meetings were held with the U.S. Environmental Protection Agency (EPA) to discuss the environmental justice methodology.

Tribal Outreach

Letters inviting participation in the PEL Study process were sent to the following tribal entities:

• Delaware Tribe of Indians
• Onondaga
• Cayuga Nation
• Oneida Nation
• Oneida Indian Nation
• Seneca Nation of Indians
• Tuscarora Nation
• Absentee-Shawnee Tribe of Indians of Oklahoma
• Eastern Shawnee Tribe of Oklahoma
• Shawnee Tribe
• Tonawanda Band of Seneca
• Stockbridge-Munsee Community, Wisconsin
• Delaware Nation, Oklahoma
• Seneca-Cayuga Nation

The letters explained the funding gap issues and the funding options being considered, and explained what a PEL Study entails. No formal input on the PEL Study was received from the Tribes.

Draft PEL Study Outreach

PennDOT released the Draft PEL Study for public comment on April 29, 2021 and accepted comments through June 1, 2021. During the comment period, PennDOT held a Virtual Public Meeting in an online, on-demand platform accessed via the project website. The Virtual Public Information Meeting was accessible to the public online, 24 hours per day, during the comment period. In addition to the virtual public information meeting website, the public was also invited to participate in a Telephone Town Hall event, where they could call in to learn more about the project, ask questions, and provide comments. The Telephone Town Hall was held on May 25, 2021, from 6:00 PM to 7:00 PM and allowed individuals, even those without internet access, to participate in the public meeting and comment period. Comments during this period were requested to be focused on the Draft PEL Study.

PEL Engagement Platform Study - Draft PEL Comment Period

• 275,359 Social Media Impressions (number of times the content was displayed, regardless of whether it was clicked on or not)
• 76 Social Media Posts
• 3,507 Social Media User Engagements (likes, reactions, comments, shares, retweets and link clicks)
• 3,004 Virtual Public Meeting Site Pageviews
• 309 Comments Received
• 6,167 Pathways Site Pageviews
• 174 Attendees at Legislator Meetings

Summary of PEL Study Comments

The following presents a summary of the predominant comments received during development of the PEL Study:

• Suggestions to raise additional funds. Many commenters had suggestions for alternative funding mechanisms to be explored. Many of these suggestions are addressed in this PEL Study (e.g., mileage-based fees, raising registration fees, raising sales taxes). A common theme was to make sure that all vehicles (e.g., electric vehicles, horse-drawn vehicles) are required to pay the fee, tax, or toll. Often this sentiment was based on fairness considerations—i.e., that all users should contribute; in other cases, it was a recognition that trends toward alternative-fueled vehicles should be accounted for.
• Opposition to tax increases. A large number of commenters recognize that Pennsylvania's gas tax is already among the highest in the country and feel the gas tax should not be raised. Others felt that no taxes or fees should be increased, but rather that increased efficiency of government and more efficient and less costly construction techniques should be explored first. Other commenters suggested significant agency-wide budget cuts in order to support highway and bridge rehabilitation and replacement projects.
• Fees should be short-term and committed to roads and bridges. Commenters suggested that increases enacted to make up for a budget shortfall should be temporary — i.e., just long enough to pay for the improvements they are funding; others had concerns that tolls would be used for items other than highways and bridges.
• Concerns about traffic congestion related to toll avoidance. Many commenters expressed concerns about the potential increase in traffic volumes on diversion routes as a result of drivers avoiding tolls.
• In favor of tolls. Some commenters were in favor of some form of tolling as means of having users of the facilities pay (in-state and out-of-state users) for improvements.
• Opposition to tolls. Many commenters wrote to express their opposition to more tolls in the Commonwealth.

Appendix D provides a detailed summary of the outreach efforts and comments received during the Draft PEL Study comment period from April 29 to June 1, 2021. Attachment 3 of the summary includes a numbered list of responses to the comments/questions received on the Draft PEL Study. A comment table lists each comment received and includes the response number(s) that correlate with the public response comment index.

Comments received after the Draft PEL Study public comment period deadline (June 1, 2021) are not included in the comment table in Appendix D; however, they were reviewed and it was determined that their themes are represented among the comments that were received during the official comment period and responded to in Appendix D.

NOTE: Appendix D is not available in the text-only version of the PEL study. Download the PDF version of the PEL study to view all appendices.

¹ A state of good repair means maintaining infrastructure assets to minimize asset life-cycle costs and potential safety risks while preventing adverse consequential impacts to service. With taxpayers' dollars in mind, one of PennDOT's goals is to make timely repairs to reduce the need for more extensive and expensive repairs later on. "An ounce of prevention is worth a pound of cure," as the adage goes. See Section 4.1 for additional detail. Return to previous place in text.

² Data in the PEL is based on Fiscal Year (FY) 2018-2019 data, projections from Fiscal Year 2018-2019 data, and other published sources. Return to previous place in text.

³Projects as of February 2021.Return to previous place in text.

⁴ PennDOT, "Pennsylvania Transportation Funding." (PDF) The $9.9 billion annual budget is based off of PennDOT FY 2018-19 values. Return to previous place in text.

⁵ Annotation No. 5 does not appear in the text-only version of the PEL study as it references a graphic included only in the PDF.

⁶According to FHWA, Environmental Justice (EJ) means "identifying and addressing disproportionately high and adverse effects of the agency's programs, policies, and activities on minority populations and low-income populations to achieve an equitable distribution of benefits and burdens." See more in Chapter 7. Return to previous place in text.

⁷Please see the PennDOT Accommodation Policy. Return to previous place in text.

This chapter describes the current funding sources, uses, and gaps for the State's transportation infrastructure. While this PEL Study is focused on identifying solutions to fund highway and bridge needs, potential funding solutions must be evaluated in the context of PennDOT's entire transportation project delivery program.

2.1 Current Funding Sources

Transportation funding in Pennsylvania comes from both Federal and State sources and flows through various PennDOT accounts, each with its own associated revenue sources and expenditure categories. Transportation funding is complex, and so the terms used are illustrated for clarity in Exhibit 6.

Exhibit 6

Funding Sources (e.g. Revenue from Fuel Tax) Accounts (e.g. Motor License Fund) Uses (e.g. Highway Maintenance)

2.1.1 Transportation Funding Sources

Federal and State transportation revenue is raised through gas taxes, licenses and fees, sales and use taxes, lottery proceeds, Pennsylvania Turnpike revenues, and general funds, bonds, and interest. PennDOT funding by revenue source for FY 2018-19 is shown in Exhibit 7 and Exhibit 8.

Exhibit 7 - Approximate Funding Sources (all transportation modes), FY 2018-19 ($ Millions)

Note: Sums may be +/- 1 due to rounding.

Exhibit 8 - PennDOT Revenue Sources (all transportation modes), FY 2018-19

Revenue sources with an * are assessed to be at greatest risk.

Out of all of PennDOT's revenue sources used across all modes of transportation, 63 percent have been identified as at risk, as highlighted in Exhibit 8. Risks to these sources are discussed in Section 2.1.2.

State Funding Sources

Total State-generated funding for PennDOT in FY 2018-19 was approximately $7.6 billion and provided approximately 77 percent of PennDOT's overall funding.

• State Gas Tax Revenue: Gas taxes are the primary source of State funding for Pennsylvania's transportation infrastructure, accounting for approximately 55 percent of total transportation revenues raised at the State level.
• State Licenses and Fees: As the second-largest State-level source of funding, license and fee revenues support nearly all modes of transportation in the Commonwealth.
• State Sales and Use Taxes: A portion of State sales taxes are used to pay for mass transit operating expenses, improvements, and administration and oversight.
• Pennsylvania Turnpike Revenue: The Pennsylvania Turnpike Commission (PTC), an entity separate from PennDOT, currently transfers $450 million per year to PennDOT for use in public and multimodal transportation; this will decline to $50 million per year starting in FY 2022-23 and running through FY 2056-57, when payments will end. This transfer of revenue between entities occurs as directed under PA Acts 44 and 89.
• State Lottery Revenue: Lottery funds are dedicated to free and reduced-fare public transportation for Pennsylvanians 65 years and older.
• State General Funds, Bonds, and Interest: State general funds are used to pay capital debt and vehicle services; general bond funds are used for transit, aviation, and rail freight; and the Pennsylvania Infrastructure Bank — which was initially capitalized in the 1990s — is a PennDOT program that provides low-interest loans to help fund transportation projects within the Commonwealth.

Exhibit 9 - PennDOT State Revenue Sources, FY 2018-19

Revenue sources with an * are assessed to be at greatest risk.

State gas taxes, which make up the largest percentage of State revenue sources, are at risk and are anticipated to decline substantially as greater fuel efficiency standards are enacted and a greater percentage of electric vehicles are introduced into the market.

Federal Funding Sources

Federal surface transportation authorization legislation determines the amount of Federal funding distributed to the states for transportation uses and designates how those funds are to be spent. Federal support for Pennsylvania's transportation infrastructure comes from the Federal Highway Trust Fund (HTF).

In FY 2018-19, total Federal funding for PennDOT transportation spending amounted to approximately $2.3 billion. Approximately $1.45 billion (63 percent) of PennDOT's Federal funding was sourced from gas taxes, $252 million was sourced from Federal sales and use taxes, and $584 million was funded through general fund allocations, bonds, and interest. The vast majority of this Federal funding is designated for highway and bridge use, while approximately 9 percent is designated for public transportation and another 2 percent is designated for aviation.

Federal Gas Taxes

The HTF is financed primarily through consumer-paid gas taxes of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel, rates that were established in 1993. ⁸ In FY 2019-20, these gas taxes generated approximately $36.3 billion in revenue nationally for the HTF, or approximately 84 percent of its total annual tax.⁹ Remaining HTF revenue is raised from various sales and excise taxes on tractors and heavy trucks, as well as from a small amount of interest on HTF reserves.

Federal General Funds

In part because of decreasing purchasing power over time due to inflation, the primarily fuel-based tax revenues that finance the HTF are not enough to fund the required spending of the program. Since 2008, Congress has provided additional funds to maintain the program's solvency. ¹⁰ For example, the Fixing America's Surface Transportation (FAST) Act—the most recent multi-year congressional reauthorization of funding for surface transportation infrastructure — provided a bailout of $70 billion in general funds to support the HTF from FY 2016 through 2020. ¹¹ Just as that authorization was expiring on September 30, 2020, Congress extended the FAST Act for another fiscal year and included an additional $13.6 billion bailout from the general fund. ¹²

In addition to federal funding, PennDOT relies on other sources of revenue to fund highways and bridges as discussed below.

Highway and Bridge Revenue Sources

Highway and bridge expenditures are funded by approximately two-thirds State sources and one-third Federal sources, as shown in Exhibit 10. Gas taxes represent the largest source of both State and Federal funding for highway and bridge uses, collectively making up approximately 74 percent of total highway and bridge funding. As stated above, this represents a high reliance on a diminishing funding source.

Exhibit 10 - Highway and Bridge Revenue Sources, FY 2018-19

2.1.2 Risks to State and Federal Transportation Funding Sources

As noted in the Commonwealth's 2019 Transportation Funding Risks Report, ¹³ transportation revenue is subject to considerable risk. This report was produced by the Pennsylvania Transportation Advisory Committee (TAC), a group established by the State Legislature in 1970 to "consult with and advise the State Transportation Commission and the Secretary of Transportation on behalf of all transportation modes in the Commonwealth" and to "advise the several modes (about) the planning, programs, and goals of the Department and the State Transportation Commission." The potential risks highlighted by the TAC in the Transportation Funding Risk Report, as calculated from FY 2017-18 through FY 2029-30, include the following:

• Reductions in Federal Appropriations: $6 Billion
• As discussed in Section 2.1.1, increasing transfers into the HTF are necessary from Congress to maintain current levels of Federal highway spending. Highway spending levels could be endangered if Congress fails to regularly approve financial transfers into the HTF or address the fund's revenue shortfalls with a long-term solution. The Pennsylvania TAC assessed this risk as being of medium likelihood.
• Vehicle Sales Tax Provision Repealed: $3.6 Billion
• Current Pennsylvania law calls for $450 million per year in vehicle sales tax revenue to be transferred out of the general fund and into a dedicated fund to finance public transportation beginning in FY 2022-23. If fiscal pressure on the general fund causes this law to be amended and vehicle sales tax revenue transfers to PennDOT are not made, funding for public transportation operations and capital programs could be greatly impacted. The TAC estimates a low likelihood of this occurring.
• Extended MLF Transfers to the Pennsylvania State Police: $1.8 Billion
• Current Pennsylvania law is set to decrease (over time) the amount of transportation funding directed to the Pennsylvania State Police, but fiscal pressure on the general fund could prevent this decrease from taking place. The TAC assessed this risk to have a medium likelihood of occurring.
• Reduced MLF Tax Receipts Due to Reduced Motor Fuel Sales and License Fees: $4.9 Billion
• Ongoing technological and societal trends are expected to decrease the value of infrastructure financing raised by gas taxes and vehicle licenses and fees over time. The TAC report indicated that the predictions related to these trends varied greatly; however, recent industry trends of growing electric-vehicle market share and product lines from auto-makers make this risk high.

Gas Tax Revenue Risk

Approximately 74 percent of all highway and bridge funding comes from Federal and State gas revenue sources. However, gas tax revenues are decreasing, driven in large part by improving vehicle fuel economy. ¹⁴ Annual average fuel consumption by motor vehicles has declined by 11 percent since the late-1990s, ¹⁵ and increased usage of electric vehicles (EVs) is expected to decrease fuel consumption even further in the coming years.

As shown in Exhibit 11, the automobile industry has committed $225 billion to the development of EVs between 2019 and 2023, with major automobile makers including General Motors, Toyota, and Ford planning dozens of EVs and expecting the EV share of their respective sales to reach up to 50 percent over the next 5 years and as high as 100 percent by 2035. ¹⁶ EV adoption of this scale and of the scales shown in Exhibit 12 and Exhibit 13 will severely impact the ability of PennDOT to adequately fund highway and bridge infrastructure through current gas taxes.

Exhibit 11 - Auto Industry EV Commitment

Source: Business Insider, NBC News, General Motors

Exhibit 12 - Project EV Share of New Vehicles

Source: BloombergNEF Electric Vehicle Outlook 2020

Exhibit 13 - EV Adoption in Pennsylvania, March 2019-March 2020

On top of this, the Federal fuel tax has not been adjusted since 1993, while inflation continues to grow each year, effectively reducing the purchasing power of this revenue source. In other words, as the prices of construction materials and labor increase over time from inflation, the amount of money required to purchase construction materials and labor must also increase to be able to buy the same quantity of items. Since the per-gallon tax rates have not been indexed to inflation, this means that the purchasing power of these revenues has been declining over time. To demonstrate the effects of inflation, take the example of buying a cup of coffee. In 1990, a cup of coffee cost approximately $0.75, whereas by 2019 the price of the same cup of coffee had approximately doubled (Exhibit 14). ¹⁷

Exhibit 14 - Increase in the Cost of a Cup of Coffee, 1990 to 2019

Inflation rates over time vary by product or industry, and construction costs have risen even faster than prices of other goods. For the 18.4-cent Federal gasoline fuel tax to maintain the same purchasing power it had back in 1993, the rate would have to be raised to approximately 33 cents as of 2020. ¹⁸ Unfortunately, it remains at 18.4 cents and is unlikely to be increased.

Exhibit 15 illustrates both the decreasing fuel consumption and the declining purchasing power of a dollar over time. Both of these factors lead to lower effective revenues from the gas tax.

Exhibit 15 - Declining Purchasing Power of One Dollar and Motor Vehicle Fuel Consumption, 1993-2018

Note: This graph shows that the number of gallons of fuel used per vehicle, per year, has dropped by about 40 gallons on average since 1993 (a 6% reduction). At the same time, the purchasing power of the dollar has declined by approximately 45% due to inflation. Together, these changes have severely affected Federal gas tax revenues.

As a result of declining fuel sales as well as declining vehicle licenses and fees, a reduction of $4.9 billion in State-generated revenue is forecast between 2018 and 2030. ¹⁹ An additional $6 billion is at risk if Federal appropriations cease to supplement the HTF, which is also funded in large part by gas taxes. ²⁰

Federal Funding Risk

The current Federal surface transportation funding legislation, the FAST Act, was due to expire on September 30, 2020. On October 1, 2020, a 1-year extension of the FAST Act was signed into law, including a transfer of $13.6 billion into the HTF from the U.S. Treasury general fund. ²¹ While this recent development extended Federal support for the current fiscal year through September 2021, it is not a long-term solution. Uncertainty remains as to the amount of Federal funding for highways and bridges that can be expected in coming years. Tax revenue coming into the HTF is not sufficient to fully support the Fund's expenditures, requiring Congress to supplement the dedicated tax revenue with funding from other sources to keep the program solvent. If Congress does not decide to provide this additional funding going forward, the level of Federal highway support currently provided by the HTF could be endangered. This long-term Federal funding uncertainty also restricts the ability of individual states to budget for the future and to commit to multi-year transportation projects.

COVID-19 Considerations

PennDOT was already experiencing funding shortfalls prior to the COVID-19 pandemic. These shortfalls have been exacerbated due to large-scale unemployment, leading to lost tax revenues. Additionally, since travel has declined substantially, PennDOT is receiving less in gas taxes and vehicle registration fees. PennDOT estimates that the COVID-19 pandemic contributed to revenue losses of more than $600 million in gas taxes since last year, with losses continuing. ²² An additional $110 million in losses is anticipated from reductions in sales tax revenues, lottery proceeds, vehicle rentals and leases, tire tax revenues, and toll collections. ²³

With these revenue losses, PennDOT has had to reduce its spending on critical infrastructure work. The agency's annual construction spending has been cut from approximately $2.2 billion to about $1.55 billion in 2020, and is projected to be $1.9 billion in 2021. This situation is not unique to Pennsylvania—State DOTs across the country are struggling with similar revenue losses, with some States' 2020 losses coming in as high as $1.2 billion in transportation funding due to COVID-19. ²⁴ Additionally, economists, States, and industry associations are predicting that COVID-19 may continue to affect transportation funding over the next 3 to 5 years. ²⁵

Changes in future travel patterns that may result from the COVID-19 pandemic are also hard to predict, and this uncertainty complicates statewide transportation budgeting and planning. Multiple acts of Federal legislation passed by the U.S. Congress in 2020 and 2021, including the Coronavirus Response and Relief Supplemental Appropriations Act, provide increased transportation funding support for States and other government agencies. While these increases in Federal funding will soften the budgetary impact of COVID-19 on PennDOT, the long-term financial impacts of the COVID-19 pandemic remain uncertain.

2.1.3 Previous Efforts to Supplement Transportation Revenue

Pennsylvania has already experienced the need to supplement current funding mechanisms with revenue infusions from the State Legislature. Recognizing the need to supplement funding levels, the Pennsylvania General Assembly and PennDOT have worked to raise additional revenue in two major appropriations over the last 15 years.

In 2007, the State Legislature passed Act 44, which was anticipated to provide approximately $946 million in additional average annual funding, of which $532 million per year would go to highways and bridges. ²⁶ The Act raised transportation revenue through a variety of sources, including a sales tax, bonds, the lottery fund, the Pennsylvania Transportation Assistance Fund (PTAF), and the PTC. However, after an unsuccessful attempt by PTC to impose tolls on Interstate 80 in order to help increase these funds, ²⁷ the originally planned Act 44 funding increase did not fully come to pass. This led to the consideration of other options for raising revenues.

Act 89, passed in 2013, removed the State retail fuel tax but increased (and eventually removed) the cap for wholesale taxes on fuel distributors. Licensing fees for vehicle registration and driver licenses were also increased, and some fines for traffic violations were increased. ²⁸ Additionally, State bonds were continued from Act 44 to use as a revenue source for capital improvements, and regular payments were still provided by the PTC for transit funding.

As shown in Exhibit 16 below, the passage of Act 89 helped to substantially improve investment in the State's infrastructure. It generated $2.3 billion per year in funds for all modes, ²⁹ including an average of $1.3 billion per year for State roads and bridges and $237 million per year for local roads and bridges. ³⁰ Act 89 has helped PennDOT complete more than 3,500 projects worth more than $10 billion since 2013. As of January 2021, PennDOT was in the process of completing more than 500 additional projects worth more than $4.6 billion, and plans to complete nearly 1,000 projects over the next 4 years totaling approximately $10.3 billion in value. ³¹

Exhibit 16 - Act 89 and the Funding Gap, 2010-2020"

Note: This graph shows Act 89's positive effect on making up a portion of declining gas revenues. Despite the supplemental contribution from Act 89, the funding gap has remained.

Sources: Governor's Executive Budget; includes all state and federal funds. PennDOT Financial Analysis. PennDOT "Act 89 and the Funding Gap" chart and "Pennsylvania Transportation Funding" document."

Notes: 2010 data corresponds with FY 2010-2011. 2011-2020 Funding Gap series is calculated as a linear interpolation between 2010 and 2021 values. Act 89 Funding estimate represents revenue raised from increased fuel tax rates included in Act 89 of 2013.

While Act 44 and Act 89 provided funding for highways and bridges, these efforts have not been sufficient to satisfy the full funding deficit. The unsuccessful application for a pilot program to toll Interstate 80 kept this 311-mile, heavily traveled freight corridor within the PennDOT system for funding maintenance and improvements. In addition, when Act 89 was passed in 2013, an assumption was made that a Federal transportation funding increase would occur in the near future to fill the gap not covered by Act 89; to date, no Federal funding increases have been realized. As a result, while some progress has been made, PennDOT highway and bridge funding remains short of what is needed to maintain a state of good repair.

2.2 Transportation Expenditures

This section describes how PennDOT allocates expenditures in meeting its transportation system responsibilities. Exhibit 17 illustrates PennDOT's transportation asset responsibilities, not only for highways and bridges, but also for airports, railroads, public transit, ports, and waterways.

Exhibit 17 - PennDOT has an Enormous Responsibility

PennDOT's funding allocations and uses (i.e., expenditures) can be considered in three broad categories: multimodal, debt service and other agencies, and highways and bridges. We discuss each of these below. Exhibit 18 represents the percentage allocation of PennDOT expenditures across these three categories.

Exhibit 18 - PennDOT Expenditures by Category, FY 2018-19

As shown in Exhibit 18, highways and bridges are the biggest component, making up 62 percent of annual PennDOT expenditures.

2.2.1 Multimodal Expenditures

Expenditures on non-automobile modes of transportation represent 25.3 percent of PennDOT's annual budget. In FY 2018-19, multimodal expenditures in Pennsylvania totaled $2.539 billion. Approximately 76.9 percent of this multimodal spending, or $1.952 billion in FY 2018-19, went to mass transit, supporting operating expenses, capital improvements, and administration and oversight. The modes with the highest associated expenditures after mass transit were rural and intercity transit and free and shared-ride transit, followed by aviation and rail freight.

Approximately 91 percent of PennDOT multimodal expenditures are sourced from State funds, with the remaining 9 percent coming from Federal sources. Exhibit 19 shows the approximate revenue sources used to pay for multimodal expenditures.

Exhibit 19 - PennDOT Multimodal Revenue Sources, FY 2018-19

Revenue sources marked with an asterisk are assessed to be at greatest risk.

2.2.2 Spending on Debt Service and Other Agencies

In addition to funding multimodal infrastructure and highways and bridges, 12.9 percent of PennDOT expenditures go to debt service and other agencies, and other miscellaneous uses. The largest expenditure within this category is funding allocated to the Pennsylvania State Police, which totaled approximately $770 million in FY 2018-19 and represented approximately 7.7 percent of total PennDOT expenditures. Other debt service and other agencies expenditures include general fund and Motor License Fund capital debt, payments to the PTC, tort payments, and transfers to other agencies. Exhibit 20 shows the magnitude of all debt service and other agencies expenditures as of FY 2018-19.

Exhibit 20 - PennDOT Debt Service and Other Agencies Expenditures ($MM), FY 2018-19

Note: MM = millions

2.2.3 Highways and Bridges

The majority of PennDOT funding goes to highway and bridge uses. In FY 2018-19, Pennsylvania highway and bridge expenditures totaled approximately $6.2 billion, representing 61.8 percent of all PennDOT expenditures. Within the highways and bridges category, expenditures can be further categorized into four sub-categories: (i) highway and bridge improvements; (ii) highway and bridge maintenance; (iii) highway payments to local governments; and (iv) highway facilities, operations, services, and other, which includes driver and vehicle services, PennDOT facilities, general government operations, Pennsylvania Infrastructure Bank, welcome centers, refunds, and other expenditures. Exhibit 21 shows PennDOT highway and bridge expenditures by sub-category.

Exhibit 21 - Highway and Bridge Expenditures ($MM), FY 2018-19

2.3 Revenue and Expenditure Summary

The following are the key findings from Chapter 2:

• Out of all PennDOT revenue sources used across all modes of transportation, 63 percent have been identified as at risk.
• The identified risks represent a cumulative revenue risk of $16.3 billion between 2018 and 2030.
• Highways and bridges are the biggest expenditure component, making up 62 percent of annual PennDOT expenditures. This is expanded upon in Chapter 3.
• Gas taxes represent the largest source of both State and Federal funding for highway and bridge uses, collectively making up approximately 74 percent of total highway and bridge funding.
• Gas taxes, which make up the largest percentage of highway and bridge revenue sources, are at risk and are anticipated to decline substantially.
• The Federal fuel tax has not been adjusted since 1993, while inflation continues to erode the value of each dollar of gas taxes collected, effectively reducing the purchasing power of this revenue source.
• Gas tax revenues are decreasing, driven in large part by improving vehicle fuel economy and a transition to electric vehicles.
• As a result of declining fuel sales, as well as declining vehicle licenses and fees, a reduction of $4.9 billion in State-generated revenue is forecast between 2018 and 2030.
• PennDOT was already experiencing funding shortfalls prior to the COVID-19 pandemic. Now, these shortfalls have been exacerbated due to large-scale unemployment and reduction in travel due to the pandemic, leading to lost tax revenues from less driving.
• Pennsylvania has already experienced the need to supplement current funding mechanisms with revenue infusions from the State Legislature twice over the past 15 years.
• At the Federal level, Congress has repeatedly needed to authorize multi-billion-dollar transfers from the U.S. Treasury general fund to keep the HTF solvent. The most recent transfers include $70 billion authorized in 2015 and another $13.6 billion authorized in 2020, but earlier transfers date back to 2008.

⁸ State Transportation Commission 2021 12-Year Program, August 2020. Return to previous place in text.

⁹ STax Policy Center, "What is the Highway Trust Fund, and how is it financed?" Return to previous place in text.

¹⁰ Congress has had to supplement the HTF 10 times since 2008 with special transfers to maintain the fund's solvency. Return to previous place in text.

¹¹Source reference (PDF). Return to previous place in text.

¹²"Near Deadline, Trump Signs Spending Bill With 1-Year Highway-Transit Extension," Engineering News-Record, September 30, 2020. Return to previous place in text.

¹³Source reference (PDF). Return to previous place in text.

¹⁴ U.S. Energy Information Administration, 2020 Monthly Energy Review. Return to previous place in text.

¹⁵ Based on EPA data, selecting light-duty vehicles with a short-wheelbase. Return to previous place in text.

¹⁶ Source references: AlixPartners; Business Insider; NBC News. Return to previous place in text.

¹⁷ Investopedia, "Inflation." Return to previous place in text.

¹⁸ Estimate based on U.S. Bureau of Labor Statistics Consumer Price Index for All Urban Consumers inflation series from 1993 to 2020. Return to previous place in text.

¹⁹ TAC Report, slide 27. Return to previous place in text.

²⁰ TAC Report, slides 16, 18, 35-36. Return to previous place in text.

²¹"Near Deadline, Trump Signs Spending Bill With 1-Year Highway-Transit Extension," Engineering News-Record, September 30, 2020. Return to previous place in text.

²²"Federal stimulus package won't erase PennDOT's funding gap or plans for new tolls or taxes," Allentown Morning Call, December 22, 2020. Return to previous place in text.

²³ "COVID-19 Will Create Long-Term Impact on State DOT Revenues," AASHTO Journal, May 29, 2020. Return to previous place in text.

²⁴ National Governors Association, "Transportation Funding and Financing During COVID-19." Return to previous place in text.

²⁵ Blazina, Ed, "COVID-19 Derails Plans to Address State Funding for PennDOT, Transit Agencies," Pittsburgh Post-Gazette, August 23, 2020. National Governors Association, "Transportation Funding and Financing During COVID-19." Return to previous place in text.

²⁶ 10-year annual averages. PennDOT, "Act 44 Funds Presentation," Funding and Legislation. Return to previous place in text.

²⁷ PA Turnpike, "Act 44 Plan." Return to previous place in text.

²⁸ "What is Pennsylvania's Transportation Bill (Act 89)?" NPR, October, 2014. Return to previous place in text.

²⁹ Including ports and waterways, public transportation, aviation, and bike and pedestrian modes. "What is Pennsylvania's Transportation Bill (Act 89)?" NPR, October, 2014. Return to previous place in text.

³⁰ 5-year annual averages. PennDOT, "Act 89 Summary Presentation," Funding and Legislation. Return to previous place in text.

³¹Projects as of January 2021. Return to previous place in text.

3.1 Overview

As discussed in Chapter 2, highways and bridges represent the largest PennDOT transportation expenditure and they are also substantially dependent on gas taxes for their funding—the funding source that is at greatest risk of decline. The result is that the gap between available transportation revenue and the projected funding available to provide adequately maintained and reliable mobility in the Commonwealth is substantial (see Exhibit 22). In fact, the majority of Pennsylvania's funding needs, and more than 86 percent of PennDOT's overall funding gap, is related to Pennsylvania's highway and bridge system.

Exhibit 22 - Highway and Bridge Gap Versus Spending

Available budgeted funding for highways and bridges is currently $6.9 billion per year, while the identified current (2020-2021) funding need is $15 billion, resulting in a current funding gap of $8.1 billion (Exhibit 23). ³² This funding gap is projected to increase to $12.6 billion in the next 10 years.

3.2 Highway and Bridge Needs

PennDOT is responsible not only for the maintenance of the Commonwealth's highways and bridges but also for improving safety and mobility, and reducing congestion through capital improvements. The needs of State highways and bridges fall into two categories: maintenance and capital improvements.

Currently, due to a national emphasis on system performance and asset management, the maintenance of National Highway System (NHS) routes, especially Interstate highway routes, is prioritized over that of lesser-traveled roads and bridges that make up the rest of the State-owned transportation network. The financial burden of maintaining NHS routes and Interstates creates a shortfall for the rest of the network, and PennDOT's lack of sufficient funding to maintain non-NHS routes compromises the efficiency of the overall transportation system.³³

3.2.1 Maintenance

Maintaining a state of good repair is critical to safety and to extending the life of highways and bridges, which reduces costs overall. Comparable to patching the roof of your home before leaks damage the drywall and soak the carpet, maintaining a state of good repair minimizes adverse secondary effects. Proper maintenance allows the roof to last longer for less money.

One example of state-of-good-repair maintenance on a roadway is resurfacing to improve pavement quality. If left unattended, poor-quality pavement allows rain, snow, and ice to erode the roadway foundation, creating potholes that would eventually require full roadway reconstruction. Another example of state-of-good-repair maintenance includes the painting of structures to prevent rusting that could lead to the need for costly steel replacement. Maintenance efforts that improve roadway safety conditions include maintaining roadway drainage, striping, markings, and rumble strips; and applying high-friction pavement surface treatments. These maintenance efforts avert the crash risk posed by standing water, improve visibility, alert drivers who are leaving their lanes of travel, and reduce the risk of vehicles skidding and losing control.

Timely and appropriate preservation and rehabilitation treatments are required to sustain Pennsylvania's desired state of good repair, which is defined as meeting FHWA minimum condition thresholds, including:

• Less than 5 percent of NHS Interstate ³⁴ lane-miles rated in poor condition and
• Less than 10 percent of total NHS bridge deck area rated as poor condition.

Pennsylvania's desired state of good repair is further defined as having:

• Less than 5 percent of NHS non-Interstate lane-miles rated as poor condition. ³⁵

As illustrated in Exhibit 24, proper maintenance can double the life of a typical transportation asset, compared to its lifespan without maintenance.

Exhibit 24 - Maintaining a State of Good Repair

Note: With sufficient revenue for maintenance, the useful life of transportation facilities can be extended substantially. Insufficient maintenance results in higher costs over the long term.

PennDOT has been working diligently to make the most of its available resources to continue maintaining roadways and bridges in a state of good repair. Exhibit 25 shows PennDOT's progress over the last decade in reducing the amount of Pennsylvania bridge deck categorized in poor condition, as well as a projection of bridge deck condition out to 2032; note that this exhibit depicts data for all PennDOT bridges, not just Interstate and NHS bridges. Exhibit 26 shows PennDOT's continued maintenance of pavement quality.

While progress has been made on reducing the deck area of bridges in poor condition, it has been out of necessity and at the expense of other improvement projects. For example, over the past decade, while the deck area of poor-condition bridges has been reduced, no substantial progress has been made to reduce the amount of pavement in fair and poor condition due to the funding gap. In addition, while the number of bridges in poor condition has been lowered, Pennsylvania remains in second place among states with the highest number of deficient bridges, and many of these remaining bridges are large, multi-lane, multi-span bridges that are costly to replace or rehabilitate. In the future, as Pennsylvania's bridges continue to age and without an increase in dedicated highway and bridge funding, the area of Pennsylvania bridge deck categorized in poor condition is projected to increase between 2022 and 2032.

Exhibit 25 - Pennsylvania Bridge Condition - All PennDOT Bridges

Note: Entries 2019 and earlier are historical, whereas entries 2020 and later are projections.

Note: PennDOT has made great strides in reducing the number of bridges rated in poor condition due in large part to a legislative funding infusion in 2013. This improvement is shown in the graph above, represented by a reduction in total bridge deck area in poor condition. However, the remaining poor-condition bridges represent some of the most expensive in PennDOT's system. The pace of fixing bridges in poor condition has slowed in recent years due to the expense of the remaining bridges and a lack of sufficient funding. Also, in each year during which bridges are replaced or rehabilitated, additional existing bridges fall into poor condition. Thus, projections show an increase in future deck area in poor condition.

Exhibit 26 - Pennsylvania Pavement Condition

Note: The flat bars showing fair and poor conditions are not because improvements are not being made. Pavement improvements are made each year, but additional road mileage ages and deteriorates pavement into fair/poor condition. Because of a lack of funding, PennDOT is essentially not gaining ground with regard to pavement condition.

3.2.2 Capital Improvements

Improvements to the roadway and bridge network can include, for example, reducing congestion by adding lanes, improving safety by adding turn lanes, installing traffic signals or widening shoulders, and modernizing the system to improve traffic control and communication. These improvements can have a substantial effect on the economy by reducing wasted time in traffic for commuters and trucks delivering products. This can mean Pennsylvanians producing more, having more time for family, and improving health through lower pollution generation. Additional discussion of the benefits to the Commonwealth's citizens is included in Section 3.4.

3.3 Highway and Bridge Funding Gap

Pennsylvania's highway and bridge "funding gap" currently totals $8.1 billion and is growing. This gap, currently comprised of $1.9 billion for maintaining the NHS system, $4.1 billion for maintaining the non-NHS system and maintenance/operations, and $2.1 billion for NHS modernization and improvements, is expected to grow by about $500 million per year to $12.6 billion in 2030.

Exhibit 27 illustrates this growing gap over 10 years, with projected unmet needs for cyclic highway and bridge maintenance.

Exhibit 27 - Projection of Increasing PennDOT Unmet Highway and Bridge Needs

Identifying ways to reduce this gap in highway and bridge funding is the first goal of PennDOT Pathways and this PEL Study.

Exhibit 28 provides a breakdown of the increasing funding gap for highways and bridges. In 2021, the highway and bridge funding gap is estimated at $8.1 billion and will grow by approximately $500 million per year, reaching $12.6 billion in 2030.

Exhibit 28 - Project Total PennDOT Unmet Highway and Bridge Funding Needs ($billions)

The highways and roads funding gap is expected to grow by about $500 million per year, reaching $12.6 billion in 2030. O&M=operations and maintenance.

Source: "Pennsylvania Transportation Funding" (PDF)

3.3.1 Maintenance Funding Gap

PennDOT owns and maintains 40,000 miles of highways and 25,400 bridges, and supports another 80,000 miles of local roads and 6,600 local bridges with funding and inspections. These assets follow a life cycle of build, maintain, and preserve, and then the cycle is repeated when the asset reaches the end of its useful life. Each type of asset has relatively consistent required maintenance cycles for various activities to extend its useful life. ³⁶ Just like your house or your car, highway and bridge infrastructure requires constant investment in maintenance.

Throughout the country, the NHS is a network consisting of major roadways and bridges important to the country's economy, defense, and mobility. It includes the Interstate Highway System, many State highways, and other principal arterials, but does not include lesser-traveled local roads. PennDOT, along with the PTC and various local municipalities, is responsible for maintaining most of this critical national asset within Pennsylvania. Specifically, PennDOT owns and maintains approximately 88 percent of the NHS pavement in the state. ³⁷

PennDOT has historically spent between $450 and $500 million per year on the Interstate Highway System, but at these levels the Interstate Highway System in Pennsylvania is approximately 60 percent underfunded. Over the next few years, funding will continue to be shifted from regional non-Interstate highways and local roads to the Interstate system to meet Federal Interstate condition and performance requirements.

In FY 2020-21, the gap between available funding for maintaining the NHS system is forecast to total $1.9 billion, of which $700 million is needed for Interstate highway and bridge maintenance and $1.2 billion is needed for maintenance/operations of non-Interstate NHS highways and bridges. Over the next 10 years, this NHS maintenance funding gap is forecast to increase to $2.9 billion.

While Pennsylvania's Interstates and most of its major highways are part of the NHS, the majority of roads maintained by PennDOT are not part of the NHS. In fact, 77 percent of PennDOT-managed lane miles are not part of the NHS. ³⁸ Non-NHS roadways and bridges also require regular maintenance that cannot be fully met by existing funding, resulting in a projected non-NHS maintenance and operations funding gap of $4.1 billion in FY 2020-21. Over the next 10 years, this non-NHS maintenance funding gap is forecast to increase to $6.4 billion.

Collectively, the funding gap for maintenance of both NHS and non-NHS highways and bridges is projected to increase from $6.0 billion in FY 2020-21 to $9.3 billion in FY 2030-31. Exhibit 29 shows Pennsylvania Interstate bridge deck area assessed to be in poor condition over the last decade and projected out to 2032. Improvements were made from 2010 to 2016, but bridge improvement progress has plateaued in the years since. In the future, the amount of Interstate bridge deck area projected to be in poor condition is expected to increase from 2022 to 2032 as Pennsylvania's infrastructure ages and deteriorates. With new dedicated funding, additional progress can be made in improving Pennsylvania's Interstate bridge condition.

Exhibit 29 - Pennsylvania Interstate Bridges in Poor Condition

Note: Entries 2019 and earlier are historical, whereas entries 2020 and later are projections.

3.3.2 Capital Improvement Funding Gap

In addition to funding needs for cyclical management of Pennsylvania's highways and bridges, projections also include an additional unmet need of $2.1 billion (as of FY 2020-21) for highway and bridge improvements including capacity expansion, modernization, and upgrades. This $2.1 billion unmet need for improvements applies primarily to the Interstate system rather than non-Interstate NHS routes, and is expected to increase to $3.3 billion over the next 10 years.

The plan put forward by the STIP Financial Guidance Work Group (comprised of representatives from MPOs, RPOs, the FHWA, and PennDOT staff), with full consensus from all MPOs and RPOs, will shift funding towards Interstate investment by approximately $150 million in FY 2020-21 and grow the investment by $50 million per year until it reaches $1 billion (FY 2027-28).

While this planned funding reallocation will partially address unmet needs on the Interstate system, it will come at the expense of funding for non-Interstate NHS needs.

3.4 Impacts on Pennsylvanians

Addressing the gap between available transportation funding and needs is not an issue for PennDOT alone, but for all Pennsylvanians and Pennsylvania drivers. Insufficient funding for critical maintenance work and for expanding the capacity of roadways in the state places a burden on taxpayers and drivers. Inadequate timely maintenance results in more extensive and more expensive repairs in the long run, increasing the overall cost to taxpayers. Poor asset conditions and congestion translate into additional costs to roadway users, including more time spent driving in congested conditions, higher vehicle maintenance costs, and increased emissions. Additional delay experienced by freight transportation can also translate to higher prices to consumers.

3.4.1 Impacts of Not Maintaining Assets in State of Good Repair

Maintaining assets in a state of good repair is critical to maintaining an efficient transportation network and extending the life of the asset, thereby reducing long-term costs. For example, restriping pavement is needed to maintain reflectivity to be seen at night, cracks in concrete should be filled before the elements begin rusting the reinforcing steel, and roads need to be repaved/resurfaced before the failure of the top layers results in a need for full-depth reconstruction. This preventive maintenance and repair improves facility life and reduces costs for Pennsylvanians.

More complex assets like bridges and tunnels are required to have regular inspections and maintenance because of their exposure to the elements and the risk of corrosion and wear. At a minimum, the National Bridge Inspection Standards (NBIS) require bridge inspections every 2 years. Some bridges, such as those with weight restrictions or in poor condition, are inspected annually or even more than once per year. With more than 25,000 State-owned bridges, PennDOT must complete approximately 18,000 inspections each year. ³⁹

Bridges and Structures

With insufficient funds, it is sometimes necessary to delay routine maintenance work on an asset such as a bridge. Delaying these repairs will lead to additional costs in the future, with the compounding effects of aging bridges, increased demand, and increased inspection and construction costs. ⁴⁰ This in turn requires Pennsylvanians to pay more for these services and repairs in the long run. Eventually, delayed maintenance can lead to increased risks of bridge failure. To combat these risks, State DOTs will often implement weight restrictions, limits on truck traffic, and emergency repairs. If deterioration goes too long and is determined to pose a safety risk, the bridge may have to be closed to all traffic. This can pose extensive travel delays to users forced to detour around the closed bridge, especially in rural areas with limited nearby crossing options.

Each day that a bridge remains closed results in additional costs to roadway users. For instance, based on the average detour length of 9.8 miles for bridges in Pennsylvania ⁴¹ and assuming vehicles travel at an average speed of 55 mph, detours cost users an average of $9.21 per trip, including travel time, fuel costs, and other vehicle operating costs. ⁴² Considering the annual average daily traffic that crosses bridges in Pennsylvania, this results in daily costs of more than $67,000. ⁴³ In the event that a bridge must be shut down for emergency repairs, delays can be substantial. For instance, in 2017, a bridge serving approximately 42,000 vehicles per day was closed for more than 2 months due to a fractured steel truss. ⁴⁴ Applying the estimated per-trip cost of a detour, the cost of this bridge closure was approximately $387,000 per day or $23.2 million in total to roadway users.

Highways

Roadways require regular repair and resurfacing work. With time and use, pavement becomes increasingly rough and can develop large cracks and potholes. The rate of deterioration can vary considerably from one roadway to the next, depending on factors such as truck weight, vehicle and heavy truck volumes, weather, and pavement design. Agencies can determine when maintenance and repair work is needed through use of deterioration curves, and also by evaluating the pavement and measuring the relative smoothness.

Beyond causing discomfort, rough roads create costs to drivers. For instance, the higher the roadway roughness, the more fuel is consumed per mile by a vehicle. Similarly, pavement roughness affects other vehicle operating costs, including vehicle maintenance, tire replacement, oil consumption, and the rate of vehicle depreciation. Fuel costs represent the largest cost to drivers of all vehicle operating costs affected by pavement quality. Exhibit 30 shows how the rate of fuel consumption per mile changes with declining pavement quality.

Exhibit 30 - Fuel Consumption Rates by Pavement Condition

Source: HDR calculations based on data from NCHRP Report 720, "Estimating the Effects of Pavement Condition on Vehicle Operating Costs," 2012. Values assume a constant average speed of 55 mph. International Roughness Index (IRI) measures the relative smoothness of a roadway where a low value of 1 represents a smooth, newly paved roadway, and a high value of 6 represents pavement in extreme deteriorated condition. Vehicle types were based on a sample vehicle fleet used to gather data for this study: Medium car=Mitsubishi Galant, SUV=Chevrolet Tahoe, Van=Ford E350, Light truck=GMC W4500, and Articulated truck=International 92000 6x4.

As shown in Exhibit 30, a medium car driving on the poorest quality pavement will use 13.6 percent more fuel on average than the same car driving on pavement in good condition. Considering all vehicle operating costs together, the change could be as great as 22 percent difference in costs driving on smooth versus rough pavement. A commuter driving an average distance of 30 miles per day to work (round trip) ⁴⁵ could spend up to $1,450 each year in vehicle maintenance costs driving on poor-quality pavement. This is approximately $548 more than what it would cost driving on smooth pavement. ⁴⁶

3.4.2 Impacts of Congestion

Lack of adequate funding may require delaying or foregoing capital improvement projects (capacity expansion, modernization, and upgrades) that could have increased capacity of the roadway network and eased congestion. Congestion is currently a substantial problem in the state. Philadelphia and Pittsburgh are ranked in the top 10 most congested cities in the country. ⁴⁷ Without investment in capital improvements, congestion is likely to worsen over time.

Costs of Travel Delay

Congestion creates several costs for roadway users, both financial and non-financial. Clearly, congestion creates delay for people traveling. This is time that travelers could have spent doing something else, whether it be spending time with family, working or engaging in leisure activities. The Texas Transportation Institute (TTI) ⁴⁸ estimates that commuters in Pennsylvania urban areas can experience up to 62 hours ⁴⁹ of delay each year (see Exhibit 31). Aggregating all 22 urban areas included in the study for Pennsylvania, ⁵⁰ this equates to approximately 325 million hours of delay per year.

This delay caused by congestion can be monetized based on a "value of time" rate, which is typically based on hourly wages. The USDOT publishes guidance ⁵¹ on value of time, providing a methodology and recommended national values. Applying these USDOT values, delay can cost drivers in urban areas up to $1,056 each year.⁵², ⁵³ Statewide, this comes to approximately $5.5 billion each year.

Costs of Fuel and Pollution

Driving in congested conditions results in financial costs to the user, including money spent on "excess" fuel. This is because, generally, driving at slower congested speeds results in lower fuel economy, ⁵⁴ requiring more gallons of fuel per mile driven. TTI (2019) estimates that each commuter wastes up to 26 gallons of fuel ⁵⁵ each year due to congestion.

Assuming an average fuel price of $2.51 per gallon, ⁵⁶ this translates to an annual cost of up to $65 per commuter ⁵⁷ in urban areas. Statewide, fuel wasted (all urban areas) due to congestion costs Pennsylvanians around $348 million per year.

Other vehicle operating costs also vary with speed. In particular, vehicle depreciation and oil consumption rates will, on average, cost more for vehicles traveling at congested speeds. ⁵⁸ Additionally, idling vehicles have been found to emit increased rates of tailpipe and greenhouse gas emissions into the air, compared to vehicles traveling at free flow speeds. These pollutants create environmental damage, as well as negative health effects for surrounding communities.

Costs of Safety and Reliability

Congestion can lead to changes in the risk of vehicle crashes. In particular, congested driving conditions have been found to increase the risk of property-damage only crashes, while simultaneously lowering the risk of major injury crashes. ⁵⁹ Given this dual effect on crashes, the net effect on safety remains ambiguous.

With the risk of increased vehicle crashes, there is also the potential for additional costs of travel time reliability. While seemingly quite similar to the cost of travel delay, travel time reliability is a different concept; it captures the dependability of travel time and is often measured using the standard deviation of travel time. In contrast to regular, predictable congestion, traffic delays caused by crashes or other unpredictable events require users to incorporate variability into their expected travel time. Often this is done by leaving a "buffer time" to ensure on-time arrival. However, this again raises the issue of opportunity cost, as this buffer time could have otherwise been spent pursuing productive work or leisure activities.

Cost to Freight Transportation

Finally, congestion can also pose additional costs to businesses transporting freight throughout Pennsylvania. According to a 2020 American Transportation Research Institute (ATRI) study, Pennsylvania has six of the top 100 "truck bottlenecks" in the United States. ⁶⁰ TTI (2019) estimates that in Philadelphia, total truck traffic experiences 8.2 million hours of delay per year. In Pittsburgh, delay to trucks is approximately 2.2 million hours per year. Using value of time recommendations from USDOT, ⁶¹ this delay to trucks translates to costs of $247 million per year in Philadelphia, and $65 million in Pittsburgh. Statewide (all urban areas), this adds up to a total cost of $430 million for all trucks (see Exhibit 32).

In addition to costs of travel time, congestion can create additional costs for freight transportation. First, for trucks transporting perishable items, there is a cost and risk associated with having goods sit in transit for long periods of time. Additionally, there are costs associated with inventory organization. With unreliable travel times, companies may choose to maintain large warehouses with sufficient stock on hand to avoid disruptions to the supply chain. However, this results in additional storage costs. Additional costs to the freight industry can be passed on to consumers through higher prices.

3.5 Highway and Bridge Funding Gap Summary

• More than 86 percent of PennDOT's overall funding gap is related to Pennsylvania's highway and bridge system.
• Available funding for highways and bridges is currently $6.9 billion per year, while the identified funding need is $15 billion, resulting in a funding gap of $8.1 billion. This funding gap is projected to increase to $12.6 billion over the next 10 years.
• Due to the funding gap, no substantial progress has been made over the past decade to reduce the amount of pavement in fair and poor condition.
• With sufficient revenue for maintenance, the useful life of transportation facilities can be extended substantially. Insufficient maintenance will cost more in the long run.
• The pace of fixing bridges in poor condition has slowed due to the expense of the remaining bridges and a lack of sufficient funding.
• The gap for maintaining the NHS system is $1.9 billion and is forecast to grow to $2.9 billion over the next 10 years, while the current non-NHS maintenance/operations gap is $4.1 billion and is forecast to grow to $6 billion over the same time period.
• The Interstate Highway System is 60 percent underfunded.
  
• Poor asset conditions and congestion translate to additional costs to roadway users, including more time spent driving in congested conditions, higher vehicle maintenance costs, and increased emissions.
• Delay experienced by freight transportation can also translate to higher prices to consumers.
  

³² PennDOT, "Pennsylvania Transportation Funding." (PDF) $6.9 billion annual budget is sum of "Motor License Fund" and "HTF Highway and Bridge" funding. Return to previous place in text.

³³Pennsylvania's Interstate and National Highway System Routes. Return to previous place in text.

³⁴ Pennsylvania Department of Transportation; Transportation Asset Management Plan 2019, p. 25. Return to previous place in text.

³⁵ Pennsylvania Department of Transportation; Transportation Asset Management Plan 2019. Return to previous place in text.

³⁶"PATransportationFunding_Needs 9120." (PDF) Return to previous place in text.

³⁷PennDOT, "Transportation Asset Management Plan 2019." (PDF) Return to previous place in text.

³⁸PennDOT, "Transportation Asset Management Plan 2019," Figure 3. (PDF) Return to previous place in text.

³⁹PennDOT Bridge Safety Inspection Frequently Asked Questions. Figure 3. (PDF) Return to previous place in text.

⁴⁰NCHRP 14-20, "Consequences of Delayed Maintenance," Interim Report, Cambridge Systematics, September 2011. Return to previous place in text.

⁴¹FHWA, National Bridge Inspection (NBI) ASCII Data, PA 2019 Data. Return to previous place in text.

⁴²HDR calculations based on vehicle operating unit costs and value of time retrieved from USDOT, Benefit-Cost Analysis Guidance for Discretionary Grant Programs, January 2020. Values escalated to 2020 dollars. Return to previous place in text.

⁴³Annual average daily traffic retrieved from: FHWA, National Bridge Inspection (NBI) ASCII Data, PA 2019 Data. Return to previous place in text.

⁴⁴Scolforo, Mark, "Bridge linking Pennsylvania and NJ turnpikes to stay closed 2 more months," Times Leader, February 2017. Return to previous place in text.

⁴⁵AAA. Return to previous place in text.

⁴⁶ Assumes vehicle occupancy of 1.67 (USDOT, BCA Guidance), 261 work days per year, and constant travel speed of 55mph. Unit values taken from NCHRP 720, escalated to 2020 dollars (first half). Return to previous place in text.

⁴⁷ "Build to Lead, Investing in PA Infrastructure," Transportation Infrastructure Task Force Report, Fall 2019. Return to previous place in text.

⁴⁸ TTI, "Urban Mobility Report," 2019. Return to previous place in text.

⁴⁹ This number is for the "urban area" of Philadelphia, which TTI defines as including some part of New Jersey, Delaware, and Maryland. Return to previous place in text.

⁵⁰ TTI includes congestion data for 22 urban areas in the state of PA, some of which span more than one state. These 22 urban areas include the following: Allentown PA-NJ, Altoona PA, Bloomsburg-Berwick PA, Chambersburg PA, East Stroudsburg PA-NJ, Erie PA, Hanover PA, Harrisburg PA, Hazleton PA, Johnstown PA, Lancaster PA, Lebanon PA, Monessen-California PA, Philadelphia PA-NJ-DE-MD, Pittsburgh PA, Pottstown PA, Reading PA, Scranton PA, State College PA, Uniontown-Connellsville PA, Williamsport PA, and York PA. Return to previous place in text.

⁵¹ USDOT, Benefit-Cost Analysis Guidance for Discretionary Grant Programs, January 2020. Return to previous place in text.

⁵² In urban area of Philadelphia. Return to previous place in text.

⁵³ Inflating USDOT values from 2018 to 2020 (first-half) values using CPI. Return to previous place in text.

⁵⁴ This is true up to a certain speed. According to the Highway Economic Requirements System (HERS) model, fuel economy improves with increasing speeds up to approximately 30 mph, and then starts to decline again. Return to previous place in text.

⁵⁵ For Philadelphia urban area. Return to previous place in text.

⁵⁶AAA prices for Pennsylvania. Accessed on 9/21/2020. Return to previous place in text.

⁵⁷ For Philadelphia urban area. Return to previous place in text.

⁵⁸ Based on outputs from Highway Economic Requirements System (HERS) model. This is true for oil consumption rates up to approximately 60 mph. Return to previous place in text.

⁵⁹"Crashes vs. Congestion, What’s the Cost to Society?" (PDF) AAA, Cambridge Systematics, November, 2011. Return to previous place in text.

⁶⁰"Top 100 Truck Bottlenecks – 2020," American Transportation Research Institute. Return to previous place in text.

⁶¹ USDOT recommends an average truck value of time of $29.50 per hour. Escalated to 2020 dollars, the value in use is $30.26 per hour. Return to previous place in text.

4.1 Overview

As shown in Chapter 3, PennDOT has substantial funding needs, and those needs are overwhelmingly related to maintaining and improving the highway and bridge system. In Chapter 3, it was demonstrated that the largest source of highway and bridge funding comes from gas taxes, but gas tax revenues are declining and are at risk as vehicles transition to greater fuel efficiency and/or more electric vehicles are developed and purchased. Chapter 4 considers potential funding alternatives to fill the funding gap and is focused on the greatest immediate need: highway and bridge funding.

Over the years, PennDOT, transportation partnerships, and planners have studied many alternatives for funding. In this chapter, we summarize the Pennsylvania Partnerships for Mobility ⁶² reports published in 2019, ⁶³ which analyzed many potential funding alternatives, broadly including:

• Sales Tax
• Personal Income, Real Estate, and Property Tax
• Fuel/Gas Tax
• Other Taxes and Fees
• Road User Charges
• Other
• Tolling

Each of these potential funding options has some merit and could be considered as part of PennDOT's long-term strategy in securing sustainable and dedicated revenue for highways and bridges. These potential solutions vary substantially in two key areas: near-term feasibility and impact on meeting PennDOT's funding needs.

Near-Term Feasibility: The ability to implement a funding alternative in the near-term—within 2 to 4 years—is essential. PennDOT's funding needs have continued to grow, and highways and bridges require investment to maintain a state of good repair and extend the life of existing assets. Options that require legislative changes or that are outside of PennDOT's control are not anticipated to be achievable within this timeframe.

Meeting PennDOT's Needs: Some combination of funding solutions dedicated to the Commonwealth's highways and bridges must be identified and implemented (near-term and long-term) to make a difference in highway and bridge conditions and adequately serve residents and commerce.

4.2 Funding Options and Evaluation

4.2.1 Sales Tax

Increasing sales tax on a variety of products to fill the transportation funding gap has been studied. This is a potentially viable long-term funding solution; however, it will require changes to the tax code, and passing of State legislation to implement. The legislation would provide direction on what the additional sales tax can be used for and how it would be distributed. As a result, increasing the sales tax is not feasible in the near-term, but it could be studied further as a potential long-term solution. Potential annual revenue from sales taxes is summarized in Exhibit 33.

Exhibit 33 – Funding Options: Sales Tax

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.2 Personal Income, Real Estate, and Property Tax

Similar to sales tax, these options would require changes in local or State tax code, which is not feasible in the near-term. Again, however, with additional legislative changes to the tax code, personal income, real estate, and/or property taxes could be considered as part of a long-term funding solution. Exhibit 34 identifies potential annual revenues from a variety of potential long-term taxing scenarios.

Exhibit 34 – Funding Options: Personal Income, Real Estate, and Property Tax

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.3 Fuel/Gas Tax

Historically, gas taxes have been the most prevalent method of funding transportation. As demonstrated in Chapter 2, this source of funding has eroded considerably over the past few decades due to inflation and improved fuel economy, reducing the value substantially. These trends are likely to continue, which will require additional legislation at the State and Federal levels to increase fuel tax, index it to inflation, and adjust based on consumer trends. Therefore, adjusting the fuel tax may be part of a long-term solution, but will not offer the immediate funding that is needed (it is not a near-term solution). Additionally, given the anticipated transition to more fuel-efficient vehicles and commitments by major automobile manufacturers to electric vehicles (e.g., General Motors has committed to an all-electric fleet by 2035), reliance on gas taxes over the long term is not recommended as a solvent solution. Fuel and gas tax revenue estimates are depicted in Exhibit 35.

Exhibit 35 – Funding Option: Fuel/Gas Tax

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.4 Other Taxes and Fees

A wide variety of other taxes and fees have been considered to raise revenue for transportation. The forecast revenue ranged from $2 million from bicycle sales fees to $550 million in Vehicle Assessed Value Fees. A vast majority of these alternatives would require legislative changes, which is not feasible in the near term, but could be considered in the long-term funding strategy.

Because these other taxes and fees would require legislative changes, would not produce substantive revenues, and/or have other challenges, these fees are not practical near-term solutions. These other taxes and fees are summarized in Exhibit 36.

Exhibit 36 – Funding Option: Other Taxes and Fees

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.5 Mileage Based User Fee

Mileage Based User Fee (MBUF) (also known as a “Road User Charges” or “Vehicle Miles Travelled” fees) generally refers to charging drivers for the use of roadways by mile. It differs from a toll in that it may use other technologies such as GPS to record miles driven. This approach has been studied in multiple states as a viable and equitable way to replace the gas tax. However, it would require establishment of a new statewide program and enabling legislation that is not currently in place. As a result, MBUF is not feasible in the near term, but could be considered as a potential long-term solution. Exhibit 37 identifies potential annual revenue from MBUFs assuming a $0.01 per mile charge.

Exhibit 37 – Funding Option: Mileage Based User Fee

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.6 Other

Finally, other options evaluated include the delay or elimination of proposed reductions in wage tax rates in areas such as Philadelphia, or re-zoning underutilized or non-needed public space to collect property taxes. The delay or elimination of the proposed reductions in wage tax rates would be a local decision in the Philadelphia area and not within the purview of PennDOT. Rezoning underutilized public property is an option subject to local zoning decisions but is projected to raise less than $15 million. Other potential solutions are summarized in Exhibit 38.

Exhibit 38 – Funding Option: Other

Note: M=Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

4.2.7 Tolling

Various scenarios for implementation of tolling within the Commonwealth have been studied, including congestion pricing, full Interstate or corridor tolling, and bridge tolling. These are summarized in Exhibit 39. A more detailed explanation of these potential funding solutions is provided in Chapter 5.

Exhibit 39 – Funding Option: Tolling

Note: HOT = high-occupancy toll; HOV = high-occupancy vehicle; M = Millions

Sources: Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019.

Bridge Tolling

Bridge tolling is the collection of revenue from those who use a major bridge, the funds from which would be used for the replacement or reconstruction and long-term maintenance of the facility. This would be a near-term solution because federal tolling legislation is in place to allow State DOTs to toll bridges for the purpose of reconstruction or replacement. In Pennsylvania, tolling authority requires authorization through the Pennsylvania Public-Private Partnership Board (P3 Board) as discussed in Section 5.2.2.

Managed Lanes

A managed lane is a lane on a highway on which the traffic is regulated by charging a toll or by encouraging carpooling. A managed lane can take the form of either an Express Lane in which all users are charged a toll for use, or a high-occupancy-toll (HOT) lane that allows high-occupancy vehicles (HOV) free passage while single-occupancy vehicles (SOV) are charged a toll. Act 88 provides the enabling legislation that permits charging user fees, or tolling, to implement price managed lanes through a P3 with Pennsylvania P3 Board Approval. With this legislation in already in place managed lanes are a near-term solution that could be implemented. As an alternative to the P3 procurement approach, supplemental State legislation could provide the authority for PennDOT to implement managed lanes. More planning and studies are needed to identify candidate corridors where managed lanes would be appropriate.

Congestion Pricing

Congestion pricing is the use of a toll on all lanes of an existing roadway where regular, recurring, and persistent congestion exists. The toll would be variable or dynamic and would change based on traffic congestion. Congestion pricing is a medium-term solution. This is because the authority to implement must come from the FHWA through the Value Pricing Pilot Program, which takes additional coordination. Additionally, the needed planning has not yet begun. Similar to managed lanes, the P3 delivery model may provide the mechanism of establishing the tolls or supplemental state legislation could be developed.

Full Corridor Tolling

Corridor tolling would be considered on interstates and expressways and could be implemented by leveraging existing tolling technology and processing infrastructure. United States Code provides states with the authority to toll expressways (non-interstates) for the reconstruction of the roadway. Interstate tolling would require acceptance into one of three slots in the FHWA Interstate Reconstruction and Rehabilitation Pilot Program (ISRRPP). The ISRRPP has been around for about 30 years with no projects successfully implemented. Tolling interstates and expressways, especially with a desired system-wide approach, would require extensive planning and analysis which has not begun and would likely take 6+ years (long-term) to advance and implement. Updated Federal legislation would be desired and would increase the feasibility of this option. As with other tolling alternatives, P3 Board approval or other supplemental State legislation would also be required.

4.3 Alternatives Funding Summary

PennDOT identified many potential alternative funding options. Each potential option comes with its own opportunities and challenges in terms of the degree to which it can fill the funding gap, time needed for implementation, approvals needed for implementation, and effects on various stakeholder groups including the traveling public. PennDOT evaluated these various factors and identified the most promising options that could be advanced in the near term, versus those that would require longer-term coordination with our partners.

To both achieve funding in the near term and fully address the funding gap over the long term, a comprehensive approach is necessary. Several potential options may be viable over the long term with the support of Pennsylvanians and the State Legislature, and with changes to regulations and law. As part of an extension of this PEL Study, these funding options should be further analyzed to determine which are reasonable to advance, and an actionable plan should be developed.

The analysis discussed in Section 4.2 is summarized in Exhibit 40. ⁶⁴ Potential funding options are categorized by term of implementation (i.e., near, medium, or long), ability of PennDOT to implement each option without required legislative changes or implementation by third parties, and potential annual revenue. The only viable near-term solutions—i.e., the only solutions that PennDOT, with P3 Board approval, has the ability to implement within 2 to 4 years—are bridge tolling and managed lanes. In the medium term, congestion pricing is anticipated to be feasible.

Exhibit 40 – Potential Funding Options Summary

Note: HOT = high-occupancy toll; HOV = high-occupancy vehicle; M = Millions

(1) Assuming P3 Board approval is obtained; the P3 Board approved bridge tolling in November 2020.

⁶² PA Partnership for Mobility. Return to previous place in text.

⁶³ Southeast Partnership for Mobility, Final Report, (PDF) May 2019. Southwest Partnership for Mobility, Final Report, (PDF) June 2019. Return to previous place in text.

⁶⁴ A more detailed table considering potential funding options is provided in Appendix A - Pennsylvania Funding Sources. Return to previous place in text.

5.1 Near-Term Plan Overview

As presented in Chapters 2 and 3, Pennsylvania currently faces a critical funding gap in maintaining and improving highway and bridge infrastructure. Chapter 4 provided a summary of the potential alternative funding options and identified that the most viable near- and medium-term solutions are various tolling options. Chapter 5 explores in greater detail the various tolling options and lays out a plan for implementation of tolling strategies. There are three types of tolling that appear feasible: bridge tolling, managed lanes, and congestion pricing, which are discussed individually in Sections 5.2, 5.3, and 5.4, respectively.

5.1.1 Advantages of Tolling

PennDOT is proposing a program based on the advantages that tolling presents over other forms of revenue collection, described in the sections below.

Those Who Use It Would Pay For It

Revenue would be collected from the people who benefit by using the facility. As currently proposed, funding would be used for construction and maintenance of the facility on which it is collected. Tolling has the added benefit that the collection of tolls from out-of-state vehicles or trucks using the facility but only passing through Pennsylvania would also contribute; other forms of revenue would not capture out-of-state users.

Dedicated Funding

Revenue generated would first and foremost pay for the facility from which it is collected, providing a dedicated source of funding to invest in the structure and roadway. This would remove the construction and structural maintenance cost from the PennDOT funding books, ensuring that regular maintenance funding is available, lengthening the life of the facility, and reducing PennDOT’s long-term costs, while providing a better facility for drivers and reducing vehicle maintenance costs.

Other Local and Regional Projects Can Advance

As discussed in Section 3.3.1, it has become necessary in recent years to shift funds from local and regional projects to fund the critical maintenance needs of Pennsylvania’s Interstate System. This has impacted funding for community road and bridge projects. By removing the cost of expensive bridge or highway widening, replacement, or rehabilitation projects from PennDOT funding books and financing them through tolling, funds can be reallocated back to local and regional projects.

Toll Collection Systems Already Exist

The PTC is already in the business of collecting tolls with tolling systems and a customer service center. The existing tolling systems could be leveraged to reduce the cost of toll collection. E-ZPass® (E-ZPass), a system of toll collection adopted by 39 member agencies within 18 states, including Pennsylvania and all its neighbors, would be used to collect the tolls. Many Pennsylvanians already have an E-ZPass account and are among those who have the 41 million E-ZPass tags in circulation nationally.

PennDOT has the Mechanisms to Deliver Tolling Projects

Unlike the other alternative funding options discussed in Chapter 4, laws and regulations already exist that provide PennDOT with the ability to toll after having met certain Federal and State requirements. These requirements are discussed in the context of bridge tolling and managed lanes in Sections 5.2 and 5.3, respectively.

Federal

USC Title 23 allows for tolling under certain conditions and with the appropriate approvals based on the type of facility, the types or methods of toll collection, and the way in which the State will use the revenue. Bridge tolling and managed lanes are tolling methods that can be advanced using USC Title 23 and FHWA tolling programs.

State

The Pennsylvania Consolidated Statute, Title 74, provides the authority to use public-private partnerships (P3) to assess user fees in the form of tolls to repair or replace the transportation facility covered by the project. The approval for tolling must come from the P3 Board after a specific request is made by PennDOT.

5.2 Bridge Tolling

This section lays out a potential approach for developing a bridge tolling program as a near-term solution to a portion of PennDOT’s funding gap. As currently proposed, bridge tolling would collect a toll at select major bridges within the Commonwealth to fund their replacement or rehabilitation and to provide a dedicated source of revenue for their maintenance. Additionally, there are major bridge projects that have already begun the project development process across the state. This provides an opportunity to advance costly and near-term projects using toll revenue within the next 2 to 4 years.

5.2.1 Approach to Bridge Tolling

Selection of Bridges

As currently proposed, only major bridges in need of replacement or rehabilitation would be considered for bridge tolling. Major bridges include substantial structures based on physical size, location, and cost to replace or rehabilitate. These structures are in a condition that warrants timely attention to enhance safety and to avoid disruptions and community impacts if weight restrictions were imposed or if closure would be required.

Proposed Procurement Method

PennDOT is currently required to use a P3 contracting method to implement tolling. A P3 contract would also be a fast way to deliver these critical bridge replacement and rehabilitation projects. These partnerships allow a contracting method referred to as Design, Build, Finance, and Maintain (DBFM).

A DBFM contract allows a developer to take a preliminary design developed by PennDOT, finalize the design, and build the facility with the flexibility to use industry innovation and best practices, pay for the final design and construction, and then maintain it for a specific period of time. PTC would be responsible for collecting the tolls using an intergovernmental agreement on behalf of PennDOT. PennDOT would retain ownership of the bridge and conduct some maintenance such as snow removal.

The development entity would be responsible for maintaining the bridge for the term of the contract, essentially acting as a warranty of the construction (or rehabilitation) of the bridge, and for ensuring quality. They would be responsible for required inspections, which would be audited by PennDOT, and regular maintenance.

The benefits of using a P3 are described below.

• Can Accelerate Delivery. Private industry is encouraged to innovate in the approach and construction of a project, which can accelerate a project’s completion.
• Can Reduce Cost. That same innovation can reduce costs for the project overall as the development entity finds efficiencies in the design and construction.
• Properly Allocates Risk. There are many risks in the delivery of a project, from unanticipated underground utilities to increasing prices of steel. A P3 allows PennDOT and the development entity to each take on the risks that each can best manage, creating efficiency and reducing risk overall.
• Leverages Private Sector Funding. With a DBFM, a development entity would pay for the facility up front and secure their own financing. This reduces risk for PennDOT and allows the development entity to find the best financing sources for their delivery model.

Toll Rates

Toll rates would be established by PennDOT and are expected to be in the vicinity of $1 to $2 for cars using E-ZPass to pay the toll. Toll rates for trucks would be higher. Those paying via "Toll-by-Plate" would be charged more to cover the additional cost of processing license plate images and billing. Generated revenue would need to be sufficient to fund the rehabilitation or replacement of the structure when financed over a term of approximately 30 years. Costs for future initiatives would be determined at the time each specific initiative is pursued.

Revenue Use

Toll revenue collected would be used to:

• Pay the development entity an availability payment (defined below) for capital cost of construction and structural maintenance activities.
• Pay for routine operations and maintenance activities for the facility, which would continue to be conducted by PennDOT (e.g., pavement line striping, snow clearing, general roadway signage, and other activities not assigned to the developer).
• Cover PTC toll collection costs.
• Pay for PennDOT’s costs in administering the PennDOT Pathways Program and programmatic expenses.
  

PennDOT’s payment to the development entity for the design, construction, and maintenance of the bridge is called an availability payment. The amount of the availability payment is determined when the contract is awarded to the development entity, but may be reduced if the development entity fails to perform in accordance with the contract.

In the unlikely event that more revenue is generated from tolls than is needed to pay for the items listed above, the excess revenue would remain with PennDOT (not the development entity) and is proposed to be used for other projects in the planning region in which the toll was collected.

If funding is already programmed for a particular bridge in the TIP, the unused programmed funding would be released back into the TIP to fund other Interstate priorities.

Toll Collection and Processing

Tolls would be collected with All-Electronic Tolling (AET), an example of which is shown in Exhibit 41. AET is a method of collecting tolls by E-ZPass tag and/or license plate images at highway speeds. There would be no toll booths or reason to slow down, therefore traffic flow would be maintained.

The development entity would coordinate with PennDOT and the PTC to install tolling equipment at the proposed bridges. This would allow drivers to maintain one account with PTC, integrate with the E-ZPass network using their current tag, reduce the cost of toll collection versus a separate operation, and accelerate project delivery. The PTC would provide all toll collection and customer service responsibilities.

Toll collection could begin at the onset of the bridge replacement or rehabilitation project and would end at the conclusion of the P3 contract.

5.2.2 Authority for Bridge Tolling

Federal Authority for Bridge Tolling

The General Toll Program authorized under 23 USC 129 allows States to toll bridges and tunnels, including highway approaches, for the purpose of replacement and rehabilitation. Revenue use is first restricted to funding the rehabilitation, reconstruction, maintenance, and costs of collecting tolls. Excess revenue may be used for other purposes, as long as they would otherwise be eligible for Federal Aid under 23 USC.

This existing Federal authorization to toll is one of the primary reasons bridge tolling is a logical near-term solution, along with its ability to achieve PennDOT goals. PennDOT’s proposed bridge tolling program would toll major bridges on the NHS, which includes Interstate, and other limited-access highways for the purpose of funding a bridge’s reconstruction or replacement.

Authorization to toll does not need to be granted by FHWA because it is already provided by Federal law. However, if Federal funds are involved in the preliminary engineering phase of a potential major bridge project, or other Federal authorizations are required, NEPA applies and the environmental analysis of the bridge replacement or rehabilitation project would need to be coordinated with FHWA. The analysis of the effects of tolling on the local communities would be discussed in the individual NEPA documents for the bridges that become part of the program.

State Authority for Bridge Tolling

Act 88 of 2012 authorized P3s for transportation projects in Pennsylvania, allowing PennDOT and other transportation authorities to enter into agreements with the private sector to participate in project delivery, maintenance, and financing. ⁶⁵ On November 12, 2020, PennDOT received unanimous P3 Board approval for a P3 initiative to implement tolls on major bridges. This approval provides PennDOT with the authority to identify and toll bridges, in compliance with other Federal and State regulations, using a P3 contracting method.

5.2.3 Benefits of Bridge Tolling

There are several benefits that can be derived from bridge tolling, including the following, which were discussed above:

• Those who use the bridge pay for the bridge.
• The bridge receives dedicated funding.
• Other local and regional projects can advance using "conventional" transportation funding.
• Toll collection systems already exist.
• PennDOT has the State and Federal mechanisms to toll bridges.

5.2.4 Challenges and Impacts of Bridge Tolling

The environmental impacts of implementing a bridge toll are typically minor on the physical and natural environment because the footprints of facilities like toll gantries are limited and often occur in an already disturbed right-of-way. Social impacts, on the other hand, often require greater attention. Imposing a toll on a critical transportation link, particularly when non-tolled alternative routes are limited, can affect people’s travel decisions and patterns for work, school, religious activities, social activities, shopping, recreation, and services because of affordability issues. Thus, mobility and access impacts have the potential to have rippling impacts on a community. Tolling has two primary potential impacts on communities:

1. Diversion: Various effects on the local community from vehicles diverting from the tolled facility to alternative routes to avoid the toll.
2. Financial: The financial impact of paying a toll or managing a toll payment account.

Diversion

Diversion occurs when a driver avoids a toll by exiting the highway before the toll or selecting an alternative route entirely. Diversion can increase the number of vehicles on other State or locally owned roadways, potentially creating congestion. Increased traffic congestion along toll diversion routes has the potential to affect neighborhood character, quality of life, mobility, and potentially cause other indirect impacts. If the diverted traffic traverses a low-income or minority neighborhood, these impacts would be considered environmental justice impacts.

Financial

While collecting revenue needed for a bridge reconstruction or replacement from the users of that bridge is equitable in terms of "you use the bridge, you pay the toll," it may be viewed as less equitable if other bridges throughout the state remain free. For example, the cost of a tolled bridge is borne at a higher level by those living in proximity to the bridge and those traveling through that area of the state; the cost is not spread out to all the taxpayers or drivers in a state. Tolling bridges in need of rehabilitation or replacement in a geographically diverse way in all regions of the state would help to balance out the financial effects of tolling throughout the state. Depending on the demographics of bridge users paying the toll, environmental justice would also be of particular concern. Especially for low-income bridge users, the financial impacts could be particularly burdensome. If financial impacts fall disproportionately on low-income or minority populations, environmental justice impacts could occur if no mitigation is provided.

Equity

Tolls can represent a higher share of income to lower-income users, leading to equity concerns. For example, if someone makes $600 per week and spends $10 per week on tolls, this represents 1.7 percent of their income. However, for someone making $1,200 per week, the same $10 per week on tolls represents only 0.8 percent of their income.

Impact Analysis

For specific projects identified as candidates for tolling, a more detailed and refined assessment of environmental and community effects will be performed as part of the NEPA process. During the project’s planning, design, and environmental evaluation processes, potential traffic diversion will be evaluated. To perform this analysis, traffic models are used to anticipate where traffic diversion may occur and to what extent. Based on the traffic analysis, environmental impacts associated with the diverting traffic will be determined. Because one of the biggest changes associated with tolling is the financial impact, special consideration is given in this PEL Study to environmental justice impacts, which would also be a primary concern addressed in the NEPA process for any bridge or roadway proposed for tolling. To link this PEL documentation to subsequent NEPA analyses, special attention is given to the approach to environmental justice (EJ) analysis and potential mitigation. Chapter 7 Environmental Justice Analysis Methodology of this PEL Study provides a methodology to be implemented on candidate tolling projects for evaluating the effects of tolling on the communities during the NEPA process, in particular on low-income and minority populations.

Mitigation

Potential mitigation strategies, as discussed in Chapter 8, will be considered if adverse effects are expected to occur. Where safety issues are identified, adverse effects on environmental or community resources may occur; if effects on minority or low-income populations are disproportionately high and adverse, potential mitigation strategies can be identified, evaluated, and implemented as appropriate. Impacts on low-income and minority populations within the communities affected by the toll must be considered.

5.3 Managed Lanes

This section lays out a potential approach for developing a tolling program using "Managed Lanes." A managed lane is a lane on a highway where the traffic is regulated by charging a toll and/or by encouraging carpooling or transit use. A managed lane can take the form of either an express lane where all users are charged a toll for use, or a HOT lane, which allows HOV free passage while SOVs are charged a toll. In both cases, toll rates are managed to maintain a minimum travel speed in the managed lanes.

Express lanes are dedicated to toll-paying traffic and are added to an existing corridor as illustrated in Exhibit 42. They can reduce congestion and improve heavy traffic areas overall by adding capacity, while maintaining a minimum travel speed for those choosing to use the express lane. An express lane can offer discounts or free travel to HOV users (including transit). With managed lanes, the existing general purpose (GP) lanes continue to provide a free option for all users and may experience some improvement in traffic flow due to the capacity added by the express lanes.

As illustrated in Exhibit 43, an HOV to HOT lane conversion is feasible only where excess capacity already exists in an HOV lane (i.e., the HOV lane is not at capacity or experiencing congestion with the existing level of HOV users). Converting the HOV lane to a HOT lane will then allow SOVs to use the lane by paying a toll; HOV users continue to use the lane at no charge.

Managed lanes are best advanced in congested and heavily traveled corridors. Corridors that might benefit from the incorporation of managed lanes are being considered by PennDOT Districts where congested or heavily traveled corridors exist; however, specific corridors for implementation of managed lanes have not yet been determined. Once candidate corridors are identified, preliminary design and alternatives analysis, environmental analysis, final design, right-of-way acquisition, and construction would need to be conducted before tolls can be collected. The fact that only one HOV lane currently exists in Pennsylvania (Interstate 279 near Pittsburgh) limits the ability to toll through HOV lane to HOT lane conversion. Interstate 279 has not been studied for an HOV to HOT conversion to date.

Revenue generation through managed lanes is considered a viable funding candidate in the near term, or 2 to 4 years. Screening should be conducted to identify congested corridors throughout the state and analyze those most feasible to move forward and benefit the regions. For this reason, a Managed Lanes Initiative should be advanced to identify potential corridors, evaluate alternatives, and initiate project design and environmental reviews for implementation in the near term.

5.3.1 Approach to Managed Lanes

Selection of Corridors

Managed lanes work best in corridors with recurring peak-period congestion/heavy traffic where lanes can be added for a HOT lane or express lane, or an existing HOV lane can be repurposed as a HOT lane. When evaluating a corridor for an express lane, the following criteria may be considered:

• Network Connectivity: ability to link popular or common origins and destinations, and whether the lane access and egress points would result in bottlenecks
• Level of Congestion/Heavy Traffic: identification and use of metrics to evaluate corridors for congestion or heavy traffic
• Travel Time Variability: potential to improve reliability and day-to-day travel times
• Person Throughput: potential for increasing person throughput, including auto and transit users
• Traffic Growth: forecasted growth and future need of the corridor
• Physical and Geometric Conditions: ability to physically locate express lanes in the corridor given roadway geometry, access points, environmental impacts, and right-of-way.
• Lane Separation: ability to adequately designate or separate the HOT lane from the GP lanes
• Potential for Environmental Effects: effects on surrounding communities resulting from the implementation of managed lanes

When evaluating a corridor for the conversion of an HOV lane to a HOT lane, the following criteria may be considered:

• Existing HOV Lane Capacity: ability of the existing HOV lane to accommodate SOVs
• Travel Time Variability: potential to maintain managed lane reliability and day-to-day travel times within thresholds
• Person Throughput: potential for increasing person throughput, including auto and transit users
• Traffic Growth: forecasted growth and future need of the corridor
  
• Lane Separation: ability to adequately designate or separate the HOT lane from the GP lanes

Procurement Method

If managed lanes projects were undertaken using a P3 mechanism, there are various approaches that would need to be evaluated as part of the Managed Lanes Initiative, but user fees in the form of tolls could be implemented only if approved by the P3 Board. If the project were completed as a traditional highway design-bid-build project, legislation would be required to allow for tolling of these new facilities.

Toll Rates

Managed lanes can have a variety of pricing structures, highly dependent on characteristics of the corridor. The goal of a managed lane is to encourage the most efficient use of the lane’s capacity while improving its reliability in preventing congestion. This requires either a variable or a dynamic toll. A variable toll is usually time- and day-based, on a fixed schedule with fixed rates (e.g., Monday through Friday from 8AM to 10AM the toll may be higher in the direction of congestion and may be lower between 10AM and 4PM; the time would be adjusted based on actual traffic). With a dynamic toll, traffic can be managed to create a reliable travel time and maintain a free-flow speed more often (e.g., the toll could change every 10 minutes based on actual congestion detected, allowing for a more reliable trip). Typically, these dynamic tolls rates have a floor and ceiling from which they are not allowed to deviate.

The toll can also be charged at fixed locations or based on the vehicle distance traveled. In the case of HOT lanes, tolls could also be waived for vehicles with two or three passengers, which again would be dependent on the volumes in the corridor.

The bottom line is that toll rates and structure are highly dependent on the amount of congestion, volume, funding need for the facility, and other factors. With all these variables, the toll rates and structures would need to be studied and proposed through the corridor screening process and customized for each location if the Managed Lanes Initiative advances.

Revenue Use

According to Federal regulations, toll facility revenue use is generally limited to debt service, reasonable return on investment, costs for the improvement and maintenance of the facility, and payments to the private party holding rights to toll revenue under the agreement. If PennDOT certifies that the facilities are adequately maintained, then surplus revenue, if any is collected, may be used for other USC Title 23 purposes (i.e., projects that would otherwise be eligible for Federal aid).

Toll Collection and Processing

Toll collection and processing could go through the PTC but could take other forms as well, dependent on the P3 procurement contracting method selected. The approach would need to be evaluated as part of the Managed Lanes Initiative to determine what would work best for the proposed project and Pennsylvanians.

5.3.2 Authority for Managed Lanes

Federal Authority for Managed Lanes

USC Title 23, Section 166, allows the conversion of an existing HOV lane to a HOT lane under certain conditions ⁶⁶ and is effective only where excess capacity exists in the HOV lane and additional vehicles can use the lane without reducing vehicle speeds or creating congestion.

USC Title 23, Section 129, allows the addition of lanes to a highway for an express lane or HOT lane as long as the number of unmanaged lanes is not decreased. This would add capacity and give drivers the option to either choose to pay a toll for a more reliable travel time or use the free lanes and potentially have a longer trip time.

State Mechanism for Managed Lanes

The P3 Law provides for the implementation of user fees, in the form of tolls, on an approved P3 project. The approval for PennDOT to toll must come from the P3 Board after a request is made by PennDOT. Without a P3 procurement structure, supplemental State legislation would be required.

5.3.3 Benefits of Managed Lanes

In addition to the benefits identified in Section 5.1, benefits of managed lanes are described in the sections below.

Travel Options and Flexibility

Managed lanes provide additional travel options, flexibility, and faster travel time for managed lane users, and improve overall traffic flow and efficient use of system capacity. They provide agencies with operational flexibility because the agency can actively manage rates to respond to traffic and changing needs. Managed lanes can also be designed and operated in various ways to meet different transportation needs, such as HOT lanes, reversible lanes, and express toll lanes.

Reducing Congestions

Managed lanes can reduce congestion by encouraging carpooling, as well as route and modal diversion. In the case of an HOV to HOT conversion, the lane can have increased throughput by allowing lane use by SOVs (managed by dynamic pricing and an SOV driver’s willingness to pay) when the lane is underutilized by HOV vehicles, taking those vehicles out of the GP lanes. In the case of express lanes, these lanes are newly added to the corridor and expand capacity overall, reducing congestion for everyone.

Financing Procurement Options, and Political Acceptance

Construction and operating costs of managed lanes are generally lower than more comprehensive congestion pricing. Managed lanes have proven to be an effective transportation solution in the United States and have widespread acceptance and operational understanding. There is also political and public acceptance of managed lanes within the United States.

5.3.4 Challenges and Impacts of Managed Lanes

Limitations on Congestion Reduction

For HOV lanes converted to HOT lanes, it can be challenging to eliminate peak hour congestion on crowded expressways, since managed lanes may comprise only a limited amount of newly available capacity. Conversion of HOV to HOT, or addition of a single, reversible express lane adds only residual capacity not used by HOV traffic; therefore, GP lanes may continue to experience high levels of peak hour congestion. Managed lanes can also lead to bottlenecks if the access points are constrained, although this can be mitigated through good road design to optimize traffic flow.

Violations and Revenue Collection

HOT managed lanes can potentially be exploited by users who do not correctly identify their vehicle as a single- or high-occupancy vehicle. This can be mitigated with an effective enforcement process to ensure that HOV rules are followed and revenues are collected.

Equity

Tolls can represent a higher share of income to lower-income users, leading to equity concerns. For example, if someone makes $600 per week and spends $10 on tolls, this represents 1.7 percent of their income. However, for someone making $1,200 per week, the same $10 per week on tolls represents only 0.8 percent of their income. With managed lanes, the same number of free lanes (GP lanes) are maintained, and tolled, managed lanes are created with new capacity. The resulting improvements in traffic flow and reduced congestion benefit all users of the managed lanes, including bus transit, and typically also improve flow in the free lanes as well. Moreover, several case studies show that managed lanes are being used by road users from all income groups and are often cited to address equity concerns. ⁶⁷ Because free lanes remain and traffic flow typically improves for all users, financial impacts to low-income populations are typically less likely when a managed lane approach is implemented, as compared to other tolling approaches.

Impact Analysis

For specific corridors identified as candidates for managed lane tolling, a more detailed and refined assessment of environmental and community effects would be performed as part of the NEPA process (should such a tolling program advance). Similar to the approach described for bridge tolling, traffic modeling would be a key analysis technique to understanding how traffic would be expected to respond to the managed lanes. Based on the traffic analysis, environmental impacts associated with changing traffic patterns would be determined. In addition to potential socio-economic impacts, physical and natural environmental impacts could result depending on the environmental conditions in which the new lane(s) would be constructed. Because free GP lanes would remain, financial impacts on low-income highway users would typically be lower than with bridge tolling; however, potential impacts on low-income users could still be an issue, as greater benefits of the managed lane may accrue to those who are more able to afford it. As a result, specific consideration is given to the approach to EJ analysis and potential mitigation, and this PEL Study provides a methodology to be implemented on candidate tolling projects for evaluating the effects of tolling on low-income and minority populations.

Mitigation

Chapter 8 discusses potential mitigation strategies.

5.4 Congestion Pricing

Congestion pricing would toll all lanes of an existing Interstate or highway where regular, recurring, and persistent congestion exists, with the goal of encouraging users to shift their travel patterns to off-peak periods, consolidate trips, carpool, or take alternative modes of transportation.

Implementation of congestion pricing would require approval from FHWA through the Value Pricing Pilot Program (VPPP). ⁶⁸ As a pilot program, it is limited to 15 states and requires an agreement with FHWA. Congestion pricing is being studied and implemented across the country and has demonstrated success. Currently, there are operational tolled facilities participating in the VPPP in California, Florida, Minnesota, and Washington. Seven other projects are being studied. Because this approach would require PennDOT’s participation in a Federal pilot program, and because of the requirements and approvals needed, this is considered a medium-term strategy, which could be advanced in 4 to 6 years. A Congestion Pricing Initiative should be advanced to study and potentially implement congestion pricing.

5.4.1 Approach to Congestion Pricing

Selection of Corridors

Congestion pricing is most appropriate in corridors or areas where regular, recurring, and persistent congestion exists, and thus congestion pricing is typically implemented in urban areas. Other considerations for identifying potential locations include potential for diversion, environmental effects of diversion, and the project’s ability to meet congestion reduction and revenue goals. No specific locations have been identified to date; however, a screening study should be conducted to identify congested corridors, evaluate their potential for congestion pricing, and—if candidate corridors are identified that fit the criteria discussed below—initiate an application for the VPPP. If accepted into the VPPP, PennDOT could then proceed with project design and environmental reviews for implementation.

When evaluating a corridor for congestion pricing, the following criteria may be considered:

• Level of Congestion: identification and use of metrics to evaluate corridors
• Travel Time Variability: potential to improve travel time reliability and day-to-day travel times
• Person Throughput: potential for increasing person throughput, including auto and transit users
• Traffic Growth: forecasted growth and future need of the corridor
• Potential for Environmental Effects: effects on surrounding communities resulting from the implementation of congestion pricing

Procurement Method

If congestion pricing projects were undertaken, they would need to be evaluated as part of the Congestion Pricing Initiative to determine if the P3 approach or another approach would work best for the proposed project and Pennsylvanians.

Toll Rates

Toll rates on a congestion pricing or VPPP corridor are required by Federal regulation to be variable or dynamic: based on time of day or current traffic volumes, respectively. As with managed lanes, the toll rates charged are highly dependent on the amount of congestion, traffic volume, funding need for the facility, and other factors. With all these variables, the toll rates and structures would need to be studied and proposed through the corridor screening process and customized for the location if the congestion pricing initiative advances.

Revenue Use

As with managed lanes, Federal regulations require that toll facility revenue use be generally limited to debt service, reasonable return on investment, costs for the improvement and maintenance of the facility, and payments to the private party under the P3 tolling agreement. If PennDOT certifies that the facilities are adequately maintained, and there is excess revenue, these funds may be used for other USC Title 23 purposes (i.e., projects that would otherwise be eligible for Federal aid).

5.4.2 Authority for Congestion Pricing

Federal Authority for Congestion Pricing

USC Title 23, Section 149 (Statutory Notes and Related Subsidiaries), includes provisions for the implementation of tolling specifically to manage congestion through the VPPP. An agency must apply to the VPPP through FHWA and be accepted into the program. Successful projects must use variable tolling to manage congestion. Acceptance into the VPPP is conditional on receiving the appropriate environmental decision and commitment to comply with reporting and revenue spending requirements.

State Mechanism for Managed Lanes

The P3 Law provides for the implementation of user fees, in the form of tolls, on an approved P3 project. The approval for PennDOT to toll must come from the P3 Board after a request is made by PennDOT. Without a P3 procurement structure, supplemental State legislation would be required.

5.4.3 Benefits of Congestion Pricing

In addition to the benefits identified in Section 5.1, benefits of congestion pricing may include those described below.

Congestion Reduction

The goal of congestion pricing is to lower peak-period traffic volumes in a region, and thereby reduce congestion and related issues such as increased travel time, emissions, and pavement damage. The resulting improvement in travel time can lead to substantial savings in terms of the value of time to road users and economic productivity.

Encourages Mode Shift to Transit

Congestion pricing can promote the use of transit and improve route efficiency; however, this benefit would be limited to areas with robust transit options such as urban centers. These urban areas are the areas where congestion pricing is typically advanced.

Generates Additional Revenues

While tolled bridges and managed lanes generate revenues associated with their use, the purpose of congestion pricing is to reduce congestion. For this reason, revenue generated can be used not only to operate and maintain the system, but for other transportation needs as well, such as improving transit services in the congestion pricing area to encourage mode shift away from the congested roadway. Using funds to improve transit service can encourage the desired mode shift, which in turn can reduce roadway congestion.

5.4.4 Challenges and Impacts of Congestion Pricing

Public Acceptance

Although administered in other parts of the world, congestion pricing is still a relatively new concept in the United States and, as such, there is less understanding and acceptance. Roadway users in the United States may be accustomed to paying a toll to cross a bridge, but not to paying a toll to influence travel behavior. It can be challenging to obtain public support for congestion pricing, as its success hinges on users changing their behavior to embrace alternative modes of travel, engage in rideshare, alter their time of day for travel, or consolidate trips.

FHWA Approval

Implementing congestion pricing would require PennDOT’s participation in a Federal pilot program and approval from FHWA through the VPPP. Because of the requirements and approvals needed, congestion pricing is considered a medium-term strategy.

Equity

Equity can be a concern of congestion pricing. Unlike managed lanes, in which all drivers have a choice to use the tolled lane or the free GP lane, congestion pricing affects all lanes of a roadway or all access points into an area. Therefore, individuals who cannot use an alternative mode of transportation or change their use of the roadway would be impacted. Depending on the demographics of users paying the tolls, environmental justice would be of concern. Especially for low-income users, the financial impacts could be particularly burdensome. If financial impacts fall disproportionately on low-income or minority populations, environmental justice impacts could occur if no mitigation is provided. Effects can potentially be mitigated by using raised revenue to improve alternative services such as transit to encourage mode shift away from the congested roadway.

Mitigation

Chapter 8 discusses potential mitigation strategies.

Changing Traffic Patterns

Congestion pricing can be applied to an expressway or geographic area (this is known as cordon pricing). With expressway congestion pricing, if parallel routes exist, diversion to those routes may occur, simply shifting the congestion to those routes. In these cases, corridor tolling (tolling the primary and adjacent routes) or other mitigation measures may be necessary. Travel patterns could also change by spreading the peak-period travel times. Cordon congestion pricing is intended to reduce vehicular congestion within a geographic area, which requires most if not all routes entering the area to be tolled. Therefore, in cordon pricing there is not typically an option to divert to another roadway. Instead, diversion may come in the form of mode-shift to transit or bikes. As with expressway or corridor tolling, travel patterns could also change by spreading the peak-period travel times. Cordon pricing may also shift traffic patterns around the edge of the congestion pricing area. For example, vehicles may turn around prior to entering a congestion pricing area or park on the edge. All of these changes in mode and traffic patterns must be studied.

Impact Analysis

For specific projects identified as candidates for congestion pricing, a more detailed and refined assessment of environmental and community effects would be performed as part of the NEPA process. The potential for environmental justice and equity impacts is similar to the bridge tolling concept because all lanes entering the congestion pricing area would be tolled. Because free lanes would not generally be available, the potential for financial impacts on low-income and minority populations would be greater than under the managed lane concept. Similar to bridge tolling, diversion impacts and changes to travel patterns are possible, depending on the specifics of the tolling program. If other routes along the corridor or into a cordon pricing area are also tolled, the potential for diversion would be lower.

Traffic modeling would again be a key tool in conducting the analysis to anticipate where traffic diversion, traffic pattern changes, travel mode, and time-of-day shifts may occur and to what extent. Based on the traffic analysis, environmental impacts associated with the diverted traffic and financial impacts to users would be determined. Impacts on low-income and minority populations would again be a primary concern to be addressed in the NEPA process. This PEL Study provides a methodology to be implemented on candidate tolling projects for evaluating potential effects of tolling on low-income and minority populations in Chapter 7.

Mitigation

Chapter 8 discusses potential mitigation strategies.

5.5 Near-Term Plan – Tolling Summary

Tolling through bridge tolling, managed lanes, and congestion pricing are all viable candidates for tolling in the near and medium terms. However, application of tolling and its viability is highly dependent on the locations considered, traffic volumes, and identified purpose and need of the project. Environmental justice and community effects are critical components of the analysis of these tolling options at candidate locations. To address the environmental justice impacts, PennDOT presents a specific methodology in Chapter 7 for evaluating tolling impacts on low-income and minority populations and presents potential mitigation measures in Chapter 8.

⁶⁵P3 Fact Sheet (PDF) Return to previous place in text.

⁶⁶ 23 U.S. Code § 166 - HOV facilities Return to previous place in text.

⁶⁷ Federal Highway Administration: "Urban Partnership Agreement Low-Income Equity Concerns of U.S Road Pricing Initiatives." Return to previous place in text.

⁶⁸ 23 U.S. Code § 149 - Congestion mitigation and air quality improvement program (Notes). Return to previous place in text.

6.1 Overview

PennDOT is facing serious funding shortfalls in both the near term and long term. This chapter identifies a draft implementation plan for both the near term and the long term. For this document, the near term is defined as actions that can be taken in 2 to 4 years; the medium term is defined as a 4- to 6-year timeframe, and the long term is defined as actions that would occur beyond 4 to 6 years.

6.2 Near-Term Action Plan (2 to 4 Years)

Near-term funding alternatives are defined as alternatives that do not require a separate Federal pilot program. Federal and State legislation already exists to allow PennDOT, with P3 Board approval, to implement tolling and make meaningful contributions towards filling the funding gap for highways and bridges. Tolling options are the only reasonable funding mechanisms over which PennDOT currently has mechanisms in place, that can generate meaningful funding, and that can be advanced to provide an early-actionable funding contribution.

A solution in the near term is essential because we have bridges in critical need of repairs today. Bridges in poor condition require frequent inspections and unexpected repairs that take limited funds away from other maintenance activities. When those repairs cannot be completed in a timely fashion due to lack of funds, it can ultimately lead to weight restrictions, lane closures, and capacity restrictions. When lanes of traffic are removed from crucial bridges, traffic congestion can form, and travel times can be greatly impacted. Longer travel times cause more than just headaches for drivers. They also lead to additional spending on gas and vehicle maintenance. For truck drivers, these additional costs can have major impacts on state and regional supply chains.

6.2.1 Bridge Tolling

Bridge tolling is identified as the first actionable funding alternative to advance for the following reasons:

• Bridges provide arguably the most critical link in the transportation system, with high safety and economic considerations.
• The list of bridges in poor condition is known, and thus no new study is required to prioritize needs.
• There are a number of bridges already in the project development process, meaning that the projects can advance without initiation of new engineering; this means they would get to procurement and construction faster, freeing up money for other needs more quickly.

Action Plan

1. Establish program/criteria: Identify criteria and parameters for identifying and selecting candidate bridges (see call out box above), P3 procurement approach, and PennDOT management needs and protocols.
2. Obtain P3 Board approval: P3 Board approval to toll major bridges was granted in November 2020.
3. Identify candidate bridge list: Review bridge needs list and prioritize candidate bridges for initial program funding.
4. Complete initial project development and NEPA decision-making: Perform initial engineering studies to identify the scope of the necessary improvements and complete decision-making through the NEPA approval stage. The EJ analysis methodology described in Chapter 7 will be used to evaluate diversion analysis and equity impacts on low-income and minority populations. Mitigation strategies described in Chapter 8 will be considered. Opportunities for public outreach will be provided during the NEPA decision-making process.
5. Determine terms and conditions of P3 procurement and select, negotiate, and administer the contract: Define the project goals and scope of the P3 procurement and determine the roles to be played by the private sector and PennDOT. Identify and define performance specifications, including the consideration of long-term operations and maintenance and the potential for performance incentives. Produce the procurement package, including addressing issues relating to financing, risk allocation, performance requirements, and operations and maintenance over the extended term of the P3 agreement. Select the development entity and administer the contract.

6.2.2 Managed Lanes

A managed lanes tolling program is identified as the second actionable funding alternative to advance for the following reasons:

• Managed lanes increase capacity in already congested corridors by charging tolls to use the new, managed lanes. Existing lanes remain free, providing a choice for roadway users.
• There are several congested corridors within the Commonwealth that could benefit from the addition of managed lanes. Funding these projects through toll collection would allow for the realization of additional capacity in the most congested corridors in the state.

Action Plan

1. Establish program/criteria: Identify criteria and parameters for selecting candidate corridors, P3 procurement approach, and PennDOT management needs and protocols.
2. Obtain P3 Board approval: P3 Board approval to add/toll managed lanes is needed to implement this funding mechanism absent independent legislative authority to add tolls to a managed lane.
3. Complete screening study: Complete a screening study to identify potential corridors.
4. Identify candidate managed lane corridors: Review congested corridor needs and prioritize candidate corridors for initial program funding.
5. Complete initial project development and NEPA decision-making: Perform initial engineering studies to identify the scope of the necessary improvements and complete environmental decision-making through the NEPA approval stage. The EJ analysis methodology described in Chapter 7 will be used to evaluate diversion analysis and equity impacts on low-income and minority populations. Mitigation strategies described in Chapter 8 will be considered. Opportunities for public outreach will be provided during the NEPA decision-making process.
6. Determine terms and conditions of P3 procurement and select, negotiate, and administer the contract: Define the project goals and scope of the P3 procurement and determine the roles to be played by the private sector and PennDOT. Identify and define performance specifications, including the consideration of long-term operations and maintenance and the potential for performance incentives. Produce the procurement package, including addressing issues relating to financing, risk allocation, performance requirements, and operations and maintenance over the extended term of the P3 agreement. Select the development entity and administer the contract.

6.3 Medium-Term Action Plan (4 to 6 Years)

6.3.1 Congestion Pricing

As congestion pricing would require application and acceptance into a pilot program, this funding option would require a longer period of time to implement compared to bridge tolling and managed lanes. Congestion pricing has been identified as the first of the longer-term options and is considered a medium-term option.

Action Plan

1. Establish program/criteria: Identify criteria and parameters for selecting candidate areas for congestion pricing, procurement approach, and PennDOT management needs and protocols.
2. Obtain legislative approval to implement congestion pricing, unless congestion pricing would be approved as a P3 initiative.
3. Complete screening study: Complete a screening study to identify potential congested areas that might benefit from congestion pricing. These would be predominantly urban areas.
4. Identify candidate congestion pricing areas: Review congested area needs and prioritize candidate areas for initial program funding.
5. Submit Expression of Interest to FHWA: Submit an Expression of Interest to FHWA’s VPPP to advance coordination and the application for admittance to the program.
6. Complete initial project development and NEPA decision-making: Perform initial engineering studies to identify the scope of the necessary improvements and complete environmental decision-making through the NEPA approval stage. The EJ analysis methodology described in Chapter 7 will be used to evaluate diversion analysis and equity impacts on low-income and minority populations. Mitigation strategies described in Chapter 8 will be considered. Opportunities for public outreach will be provided during the NEPA decision-making process.
7. Determine terms and conditions of P3 procurement and select, negotiate, and administer the contract: Define the project goals and scope of the P3 procurement and determine the roles to be played by the private sector and PennDOT. Identify and define performance specifications, including the consideration of long-term operations and maintenance and the potential for performance incentives. Produce the procurement package, including addressing issues relating to financing, risk allocation, performance requirements, and operations and maintenance over the extended term of the P3 agreement. Select the development entity and administer the contract.

6.4 Long-Term Action Plan (6 Years and Beyond)

6.4.1 Corridor Tolling, Sales Tax, Personal Income Tax, Real Estate and Property Taxes, Mileage Based User Fees, and Other Taxes and Fees

Additional alternative funding options with varying potential described in this study include corridor tolling, sales tax, personal income tax, real estate and property taxes, mileage based user fees, and other taxes and fees. Given the anticipated transition to more fuel-efficient vehicles and commitments by major automobile manufacturers to electric vehicles, reliance on gas taxes over the long term was not found to be an effective solution.

Action Plan

1. Establish program/criteria: Identify criteria and parameters for selecting these long-term alternative funding options and list requirements for implementing these options.
2. Additional studies: Conduct additional studies to determine which of the remaining alternative funding options would best address remaining funding shortfalls.
3. Identify candidate long-term alternative funding options: Review long-term options and determine which appear most promising for addressing remaining funding needs.
4. Action plan: Develop an action plan for implementing the favorable alternative funding options:
   
1. Identify legislative action and/or application for pilot programs that would be required for the funding option(s) selected for implementation.
2. Determine delivery/contracting mechanism for implementation (including the potential advantages of the P3 delivery method).
3. Conduct screening studies and identify candidate projects as appropriate for the funding option(s).
4. Identify engineering design work to be conducted.
5. Identify environmental analyses to be conducted including NEPA and other associated environmental laws, including environmental justice.
6. Establish program/criteria for specific funding option(s).
7. Complete initial project development and NEPA decision-making, including public outreach.
8. Proceed with determined delivery mechanism to carry out construction and implementation.
   

7.1 Overview

As discussed in Chapter 5, there are two potential near-term and one potential medium-term tolling strategies for addressing PennDOT's highway and bridge funding gap. In each case, one of the primary concerns with regard to implementing a toll is the potential effect on minority and low-income populations. This chapter lays out a recommended methodology for analyzing potential impacts on low-income and minority populations, should either of the near-term or the medium-term tolling solutions move forward for implementation. As mentioned above, the impact analysis associated with any specific facility proposed for tolling would occur within the NEPA environmental analysis process associated with those individual projects.

7.2 Regulatory Background

Executive Order (EO) 12898, Federal Actions to Address Environmental Justice in Minority and Low-Income Populations (February 11, 1994), directs Federal agencies to identify and address, as appropriate, disproportionately high and adverse human health or environmental effects of programs, policies, and activities on minority and low-income populations. To achieve effective and equitable decision-making, the USDOT identifies three fundamental principles of environmental justice to consider in all USDOT programs, policies, and activities:

• To avoid, minimize, or mitigate disproportionately high and adverse human health and environmental effects, including social and economic effects, on minority and low-income populations.
• To ensure the opportunity for full and fair participation by all potentially affected communities in the transportation decision-making process.
• To prevent the denial of, reduction in, or substantial delay in the receipt of benefits by minority and low-income populations.

FHWA Order 6640.23A, FHWA Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (June 2012) defines an environmental justice population as any readily identifiable group of minority and/or low-income persons who live in geographic proximity and, if circumstances warrant, geographically dispersed/transient persons of those groups (such as migrant workers, homeless persons, or Native Americans) who will be similarly affected by a proposed FHWA program, policy, or activity. Minority is defined as any individual or group that self-identifies as a member(s) of the racial categories Black/African American, Asian American, American Indian/Alaskan Native, Native Hawaiian/other Pacific Islander, and the ethnic category Hispanic/Latino. Low-income is defined as a person whose median household income is at or below the Department of Health and Human Services (HHS) poverty guidelines.

EO 12898 requires that Federal agencies develop strategies that address environmental justice in Federal actions. It also stipulates that the EPA convene an Interagency Working Group on Environmental Justice, which is comprised of members from 17 Federal agencies, including the USDOT, and several White House offices. Each member is tasked with guiding, supporting, and enhancing Federal environmental justice and community-based activities. In addition to the Interagency Working Group, there are many other Federal, State, and local organizations that provide resources and oversight of environmental justice, including the Pennsylvania Department of Environmental Protection Office of Environmental Justice (OEJ), the Pennsylvania Environmental Justice Advisory Board (EJAB), the PennDOT Bureau of Equal Opportunity, and the staff at the MPOs and RPOs in Pennsylvania and across the country.

In the memorandum transmitting EO 12898, the President encouraged agencies to account for environmental justice principles in the implementation of Title VI of the Civil Rights Act of 1964 (Title VI), NEPA, and public disclosure laws such as the Freedom of Information Act. Title VI prohibits discrimination by recipients of Federal financial assistance on the basis of race, color, and national origin. Supplemental legislation provides these same protections from discrimination based on sex, age, disability, or religion. Environmental justice strengthens Title VI by requiring Federal agencies to make achieving environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on low-income and minority populations. MPOs/RPOs and State agencies, as recipients of Federal funds, incorporate environmental justice principles in Title VI equity analyses that are prepared for LRTPs and TIPs.

7.3 Environmental Justice Analysis Methodology

This PEL document addresses environmental justice in two ways – consideration of environmental justice concerns for the PennDOT Pathways Program as a whole, and methodology for conducting EJ analysis for specific projects, in particular the near-term/medium-term tolling options within the Commonwealth.

The EJ analysis conducted for the PennDOT Pathways Program and documented below in Section 7.3.1 will support the efforts of the MPOs, RPOs, and PennDOT in their obligation to incorporate environmental justice principles into the Title VI analysis of the STIP, TIPs, and regional LRTPs. The EJ analysis methodology described below in Section 7.3.2 will be used to assess whether proposed funding solutions would result in disproportionately high and/or adverse human health or environmental effects on low-income and minority populations for individual projects/locations.

The following Federal, State, and industry documents, developed to guide compliance with EO 12898, were used in developing the program analysis as well as the project-specific methodology:

• FHWA Order 6640.23A, FHWA Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (June 2012)
• USDOT Order 5610.2a, Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (May 2012)
• FHWA Environmental Reference Guide (April 2015)
• USDOT Environmental Justice Strategy (November 2016)
• Federal Interagency Working Group on Environmental Justice & NEPA Committee, Promising Practices for EJ Methodologies in NEPA Reviews (March 2016)
• Pennsylvania Department of Transportation Project Level Environmental Justice Guidance, Publication No. 746
• Pennsylvania Department of Transportation Every Voice Counts Environmental Justice Moving Forward, Publication No. 737
• National Academies of Sciences, Engineering, and Medicine Assessing the Environmental Justice Effects of Toll Implementation or Rate Changes: Guidebook and Toolbox, Washington, DC (2018)
• AASHTO Practitioner's Handbook #3: Managing the NEPA Process for Toll Lanes and Toll Roads (January 2006)

These documents and the analysis/methodology that follows are also consistent with environmental justice guidance issued by others, including the Council on Environmental Quality and the EPA.

7.3.1 Planning Level Analysis

The FHWA and FTA Statewide Planning and Metropolitan Planning Rule, Title 23 Code of Federal Regulations Part 450, calls for actions to prevent discrimination early in the planning process, which affects long-range planning and project programming at the State and local levels. For this PEL Study, PennDOT solicited input from low-income and minority populations to identify concerns about potential near- and long-term solutions that are recommended to address Pennsylvania's transportation funding gap, including tolling initiatives. As near- and long-term solutions are selected for implementation and specific projects are initiated, EJ analysis will be performed at the project level in accordance with Federal and State guidance.

Transportation planning is a continuous process that begins with the identification of transportation needs, leads to the development of an LRTP, and ultimately results in the development and implementation of specific projects in the STIP, which encompasses projects that are identified, prioritized, and approved by regional MPOs and RPOs in their TIPs. Environmental justice requires the consideration of affected populations' concerns during each step of the planning process. By addressing these opportunities and challenges at the beginning of the process, a planning organization improves its chances of developing a plan or program that provides an equitable distribution of transportation benefits.

As plans to fill Pennsylvania's transportation funding gap solidify through the development of the PennDOT Alternative Funding Pathways Program, tolling policy and near- and long-term solutions will be identified and addressed in the Statewide and Regional LRTPs, which have a 20-year horizon, and the STIP, which covers a 4-year period. Cyclical coordination with the MPOs and RPOs during program development will occur as specific program elements are identified for inclusion in the regional TIPs. Opportunities for public participation and consideration of environmental justice issues will occur in accordance with Federal guidance and local public involvement plans during each step of this planning and programming process. The results of the project-level EJ analysis performed in accordance with the methodology outlined below will support the obligations of the MPOs, RPOs, and PennDOT with regard to environmental justice.

PEL PUBLIC AND AGENCY OUTREACH

PennDOT provided opportunities for public and agency input into the development of this PEL Study that included the following:

• Posting of information on the Pathways Program's website
• Virtual public engagement period between November 17 and December 17, 2020
• Solicitation of comments after posting of the candidate bridge list on February 19, 2021
• Establishment of an Equity in Transportation Working Group (meetings on March 10, 2021, and March 31, 2021)
• Administration of an environmental justice focus group panel survey in March 2021
• Availability of the Draft PEL Study for public comment from April 29 to June 1, 2021
• Presentation at an Agency Coordination Meeting on January 27, 2021
• Meetings with the EPA to discuss EJ analysis methodology
• Letters sent to Federally recognized Tribes

These outreach measures and a summary of the comments received are described below.

Public Engagement Platform

PennDOT launched the Pathways Program's website to educate the public on the funding gap for highway and bridge transportation needs in the Commonwealth and the potential alternative funding solutions being studied. In order to get meaningful early input from the public regarding potential alternative funding solutions, an online engagement period was held between November 17 and December 17, 2020. The online engagement platform provided a comment form that allowed individuals to submit their comments directly within the platform website and noted other ways in which comments could be submitted, including the Pathways Program email address and hotline number. PennDOT issued a press release and conducted social media and stakeholder outreach to notify as many Pennsylvanians as possible to maximize public participation in the online engagement platform. During the engagement period, there were approximately 30,700 website visits, and 378 comments were received.

Commenters suggested that equity impacts and the potential impacts associated with traffic diversion routes—traffic congestion, air quality, and safety—be studied in the PEL. One commenter noted that many of the larger bridges and highly traveled roads are in communities in which equity is an issue, and that user fees will have a greater impact on those with less access to opportunity and can potentially reinforce the cycle of poverty and disenfranchisement. This commenter requested that planning for the use of new revenue also consider the principles of equity. One commenter stressed the importance of identifying mitigation measures for those living in communities in which the potential for toll avoidance is limited.

On February 19, 2021, PennDOT began engaging communities, stakeholders, and legislators in the Pathways Program's MBP3 Initiative and announced nine bridges across the state that were candidates for tolling. The primary goals of this outreach were to continue to educate the public on the funding gap for highways and bridges in the Commonwealth, introduce the MBP3 Initiative for potentially tolling bridges as a near-term funding solution, and to receive meaningful input from the public regarding potential alternative funding solutions. The MBP3 outreach program continued use of a central online platform as an integral extension of the Pathways Program website, and added individual web sites for each of the candidate bridges where the community could express their thoughts and opinions. Virtual meetings were held with legislators, stakeholder organizations and individuals, and members of the public statewide; emails were sent, social media posts were published, and news releases and media alerts were issued. While not specifically a comment period on the PEL Study, many of the more than 7,000 comments received through this outreach were related to the funding gap and potential solutions, and contained relevant suggestions informing the PEL Study.

The most common comment themes were very similar to the comments received specific to the PEL outreach conducted in November and December 2020. The following is a summary of the most common themes from the MBP3 outreach that were relevant to the PEL Study:

• Opposition to tolls
• Opposition to tax increases
• General dissatisfaction, including comments encouraging cutting PennDOT budget/being more efficient
• Financial concerns regarding being able to afford the tolls
• Other suggested means of raising revenue, such as selling bonds and legalizing marijuana and using those tax revenues
• Concerns related to impacts associated with travelers avoiding the bridges (like congestion on alternate routes and lost business from diverted traffic). Some indicated they will avoid the tolls by diverting to other routes.

Submitted Environmental Justice Comments

A total of 10 individuals submitted comments during the November 17 to December 17, 2020, comment period via the website that were in whole or in part related to environmental justice and/or equity during development of this PEL Study. Several commenters noted that funding would come disproportionately from the lower income bracket or would impact lower income residents unfairly. One commenter noted that tolls on non-Interstate divided highways would be a regressive tax. (A regressive tax has a rate that decreases as the income of the taxpayer increases, and thus generally benefits those with higher incomes.) One commenter noted that since more white-collar workers work from home, blue-collar workers will bear the burden of usage taxes. Several commenters noted that road user charges would be unfair to those who live in rural areas and drive farther to get to work than those who live in urban areas. Several commenters suggested that a vehicle value-based registration fee may be the most equitable solution. One commenter recommended that State and local gas taxes be indexed to the Producer Price Index and total fuel consumption, with annual fees assessed on alternative fuel vehicles.

Equity in Transportation Working Group

Based on PennDOT's commitment to reaching and engaging historically and typically under-represented communities through Pathways Program outreach, an Equity in Transportation Working Group was convened to provide input on the potential impacts to under-represented communities, including low-income and minority populations, across the Commonwealth. The group was developed to provide statewide, high-level representation for historically underserved populations. Invitations were sent to 50 entities representing nonprofits such as AARP, NAACP, and Pennsylvania Developmental Disabilities Council; State and Federal agencies such as the Pennsylvania Office of Environmental Justice and the EPA Environmental Justice Working Group; representatives of State boards and commissions including the PA Commission on African American Affairs, the PA Commission on Asian Pacific American Affairs, the PA Commission on Latino Affairs, and the Pennsylvania Environmental Justice Advisory Board, and representatives from State MPOs and RPOs and other local government associations. To date, two meetings have been convened (March 10, 2021, and March 31, 2021); 28 members participated in one or both meetings.

Participants discussed a wide range of issues focused on low-income and minority populations. Key among the concerns were potential impacts of diverting traffic on low-income and/or minority communities resulting in increased pollution, congestion, and other impacts, and the financial impact of tolling on low-income persons. Language barriers were discussed; participants indicated that many different languages are spoken and that understanding the regulations and tolling programs would be a challenge. It was advised that any increase in cost will affect those who are struggling to meet their basic needs and that offsetting impacts of each option will be key for low-income communities, communities of color, and historically under-represented communities in Pennsylvania.

Bridge tolling and tax and fee increases were seen as having the greatest impacts. It was pointed out that tolling programs are essentially a flat tax that will affect low-income populations at a greater level. Managed lanes were seen as having the lowest impact because free lanes would remain available. Participants expressed that front-loading an E-ZPass would be a challenge for low-income populations, meaning that they might not be able to get an E-ZPass and would then pay more for the toll-by-plate option. The same issue applies for those who cannot afford a vehicle, but rent or use Zipcars®. Additionally, paratransit costs could increase affecting those who cannot drive, and many individuals with disabilities are also low-income. Those who drive for Uber or Lyft could also be impacted, and some low-income persons drive for these services.

Environmental Justice Focus Group Panel Survey

To elicit feedback about potential funding alternatives, a digital survey was administered in March 2021 to low-income and minority Pennsylvanians. Survey respondents were recruited through a paid survey panel. Of the 311 survey respondents, 201 reported a minority race/ethnicity and 181 reported their household income as $25,000 or less. The goal of the survey was to gather input from minority and low-income Pennsylvanians on their impressions of the alternative funding options. Survey participants were asked a series of closed and open-ended questions about seven potential alternative funding options: bridge tolling, managed lanes, congestion pricing, corridor tolling, road user charges, vehicle-related taxes and fees, and non-vehicle-related taxes and fees.

Of the funding options, participants were most in favor of managed lanes. For minority Pennsylvanians who also report household incomes $25,000 or less, the top option was split between bridge tolling and managed lanes. Key concerns from survey respondents included:

• Concerns about cost and affordability
• Concerns that tolls could cause congestion or hurt the economy
• Concerns on how funds would be used
• Concerns that the options unfairly affect low-income populations
• Concerns that administrative costs would outweigh the benefits

Agency Outreach

In addition to public outreach, PennDOT conducted outreach with Federal and State resource agencies. PennDOT participated in an ACM on January 27, 2021. The purpose of the meeting was to present an overview of the Pathways Program and solicit feedback for the PEL Study.

The meeting was attended by representatives from a number of Federal and State agencies, including resource agencies, transportation agencies, and regional and metropolitan planning organizations. Issues discussed included bridge tolling and procurement processes, maintenance, schedule, and the environmental process. Environmental justice concerns and potential mitigation for low-income travelers were also discussed. In addition to the ACM, meetings were held with the EPA to discuss the environmental justice methodology.

Tribal Outreach

Letters inviting participation in the PEL Study process were sent to the following Tribal entities:

• Delaware Tribe of Indians
• Onondaga
• Cayuga Nation
• Oneida Nation
• Oneida Indian Nation
• Seneca Nation of Indians
• Tuscarora Nation
• Absentee-Shawnee Tribe of Indians of Oklahoma
• Eastern Shawnee Tribe of Oklahoma
• Shawnee Tribe
• Tonawanda Band of Seneca
• Stockbridge-Munsee Community, Wisconsin
• Delaware Nation, Oklahoma
• Seneca-Cayuga Nation

The letters explained the funding gap issues and the funding options being considered, and explained what a PEL Study entails. No formal input on the PEL Study was received from the Tribes.

7.3.2 Project-Level Environmental Justice Analysis

Consistent with the documents referenced above, the EJ analyses for specific projects will be performed by completing the following process:

• Step 1: Define the Study Area. Consistent with NEPA practices, identify the reasonable and logical boundaries by considering the likely origins and destinations of those who would be affected by the toll and the likely diversion routes they might use to avoid the toll.
• Step 2: Identify Low-Income and Minority Populations. Collect recent data on race, color, national origin, income, tribal governments, and seasonal and migrant workers in the study area and apply FHWA and PennDOT methodology to identify low-income and minority populations.
• Step 3: Solicit Input from Low-Income and Minority Populations. Using PennDOT's Public Involvement Handbook and other environmental justice outreach guidance, identify appropriate outreach techniques. Through targeted outreach to potentially
• affected low-income and minority populations, identify transportation needs and concerns about the project to inform Steps 4, 5, and 6.
• Step 4: Evaluate Adverse and Beneficial Effects. Analyze whether the project would create impacts to communities or populations in the near, medium, or long term. Then, with input from the entire community, including low-income and minority populations, assess whether the impacts are adverse, beneficial, or both.
• Step 5: Identify Disproportionately High and Adverse Effects. Determine whether adverse effects are borne predominately by low-income and minority populations and/or if the effects borne by low-income or minority populations are greater than those effects borne by non-environmental justice populations.
• Step 6: Evaluate Mitigation Measures. If adverse effects that would be borne predominately by low-income and minority populations are greater in magnitude than the adverse effect that would be suffered by the general population, consult with the community to identify measures to avoid, minimize, or mitigate the impacts. Determine whether the mitigation measures are practical. Practical mitigation measures are those that are effective and do not create other adverse effects that are more severe; feasible in terms of implementation and operation; and cost-effective while maintaining the financial viability of the project.
• Step 7: Re-evaluate Disproportionately High and Adverse Effects and Document Decision. If practical mitigation measures have been identified, re-evaluate whether, with those measures in place, adverse effects borne by low-income and minority populations are still appreciably more severe or greater than those effects borne by populations that are not low-income or minority, or whether the measures are effective in offsetting the impacts.

In accordance with FHWA Order 6640.23A, FHWA will ensure that any of their respective programs, policies, or activities that have the potential for disproportionately high and adverse effects on populations protected by Title VI ("protected populations") will be carried out only if (1) a substantial need for the program, policy, or activity exists, based on the overall public interest; and (2) alternatives that would have fewer adverse effects on protected populations have either (a) adverse social, economic, environmental, or human health impacts that are more severe; or (b) would involve increased costs of an extraordinary magnitude.

More detailed discussion of the methodology for each step in the process is presented below. This methodology will be refined over time as more individuals and organizations become involved in the process and best practices in the identification of low-income and minority populations, outreach methods, and assessment of effects and mitigation are developed.

Identify The Study Area

For evaluating the effects of implementing a toll, the primary issues are whether disproportionately high and adverse human health or environmental effects would be borne by low-income and minority populations, and whether adverse impacts associated with traffic diversions would have greater effects on low-income and minority populations as compared to non-low-income and non-minority populations. The extent to which tolls would be more burdensome for low-income people, compared to those with higher incomes, is a consideration.

StreetLight Data will be used to inform travel demand modeling and identify the reasonable and logical study area boundaries for assessing the effects of toll diversion. StreetLight Data uses smartphone locational information to measure activity on all streets. The StreetLight Data will be processed to access the origins and destinations of the bridge traffic flows in four time periods: 6AM to 10AM, 10AM to 3PM, 3PM to 7PM, and 7PM to 6AM to inform the travel demand model (TDM). Origins and destinations outside the TDM area or the regional MPO/RPO area will be excluded from consideration. The study area will be defined as the area including the Census block groups that encompass origins and destinations of those who would be subject to the toll, with the exception of long-distance through-trips.

Identify Environmental Justice Populations

A key element of project-level EJ analysis entails reviewing basic socioeconomic characteristics about the people who live and work in the study area to determine the presence of readily identifiable groups of low-income and/or minority populations. Groups of low-income and/or minority populations could occur as cohesive neighborhoods within a municipality or could encompass a broad area with no specific concentrations of protected populations. In accordance with the PennDOT guidance, the identification of low-income and minority populations should be based on available demographic data, coordination with persons or organizations with knowledge of the area, and field observations. These steps are discussed below.

Available Demographic Data

Data will be collected using the latest available U.S. Census Bureau American Community Survey (ACS) 5-Year Estimates for all Census block groups within the study area. ⁷⁰ Study area data will be aggregated, and poverty and minority status data for the county, MPO TDM area, Pennsylvania, and adjacent state(s), if appropriate, will be presented for comparison purposes.

Based on the U.S. Census Bureau ACS 5-Year Estimates (2014-2018), the poverty rate in Pennsylvania is 12.8 percent. As shown on Exhibit 44, the poverty rates in Pennsylvania counties ⁷¹ vary between 6.1 percent in Bucks County and 24.9 percent in Philadelphia County. As shown on Exhibit 45, the poverty rates in regional MPO areas vary between 8.8 percent in Adams County MPO and 18.4 percent in Centre County MPO.

Exhibit 44 - Minority and Low-Income Characteristics in Pennsylvania Counties

Notes:

1. Non-White includes Black (Black or African American alone, not Hispanic or Latino); Asian (Asian alone, not Hispanic or Latino); Other (American Indian and Alaska Native alone, not Hispanic or Latino; Native Hawaiian and Other Pacific Islander alone, not Hispanic or Latino; Some other race alone, not Hispanic or Latino; Two or more races, not Hispanic or Latino); Hispanic (Hispanic or Latino; persons of Hispanic origin may be of any race). From U.S. Department of Commerce, Bureau of the Census, American Community Survey 2014-2018 Estimates.
2. Percent of individuals with incomes below the U.S. Census Bureau's established income thresholds for poverty levels. From U.S. Department of Commerce, Bureau of the Census, American Community Survey 2014-2018 Estimates.
3. Pennsylvania portion only. Portions of New York and New Jersey will be included as warranted by study area definition.
   

Source: U.S. Census Bureau ACS 5-Year Estimates (2014-2018)

Exhibit 45 - Minority and Low-Income Characteristics in Pennsylvania's MPOs and RPOs

Notes:

1. Non-White includes Black (Black or African American alone, not Hispanic or Latino); Asian (Asian alone, not Hispanic or Latino); Other (American Indian and Alaska Native alone, not Hispanic or Latino; Native Hawaiian and Other Pacific Islander alone, not Hispanic or Latino; Some other race alone, not Hispanic or Latino; Two or more races, not Hispanic or Latino); Hispanic (Hispanic or Latino; persons of Hispanic origin may be of any race). From U.S. Department of Commerce, Bureau of the Census, American Community Survey 2014-2018 Estimates.
2. Percent of individuals with incomes below the U.S. Census Bureau's established income thresholds for poverty levels. From U.S. Department of Commerce, Bureau of the Census, American Community Survey 2014-2018 Estimates.
3. Pennsylvania portion only. Portions of New York and New Jersey will be included as warranted by study area definition.

Source: U.S. Census Bureau ACS 5-Year Estimates (2014-2018)

Based on the U.S. Census Bureau ACS 5-Year Estimates (2014-2018), the minority rate (percent non-white) in Pennsylvania is 19.2 percent. As shown on Exhibit 44, the minority rates in Pennsylvania counties vary between 2.0 percent in Elk County and 58.8 percent in Philadelphia County. As shown on Exhibit 45, the minority rates in regional MPO areas vary between 3.0 percent in Northern Tier Regional Planning and Development Commission and 34.6 percent in Delaware Valley Regional Planning Commission.

Given the variation in low-income and minority population characteristics in Pennsylvania's cities, suburbs, and rural areas, selecting a statistical reference area to identify the block groups that may have meaningfully higher low-income and minority populations is problematic. In Pennsylvania, OEJ, EJAB, and the MPOs/RPOs use a variety of thresholds to identify protected populations. Both OEJ and EJAB identify low-income and minority populations using ACS data at the Census tract level where the percent in poverty is greater than or equal to 20 percent and non-white population is greater than or equal to 30 percent (see Exhibit 46). PennDOT guidance does not recommend the use of thresholds to identify protected populations but suggests using Census data and/or the EPA's on-line EJSCREEN tool as a starting point, supplemented by coordination with knowledgeable parties, and field observations.

As a result of these considerations, the following demographic data will be collected:

• Latest Available U.S. Census Bureau ACS Data. The block groups in the study area with a poverty rate greater than or equal to 20 percent and non-white population greater than or equal to 30 percent will be identified. To obtain a more granular level and ensure that pockets of low-income and minority populations are not missed in the Census block group data, a dot map showing minorities and those in poverty (1 dot = 100 people) will be overlaid on the study area map. Exhibit 47 illustrates an example of where pockets of minorities and those living in poverty extend beyond the low-income and minority block groups.
• EJSCREEN. The most up-to-date EJSCREEN data will be used to graphically display the concentrations of minority and low-income populations as defined by EPA (populations with household income less than or equal to twice the Federal poverty level). This data (see Exhibit 48 and Exhibit 49) will be analyzed in relation to the U.S. Census Bureau ACS data collected to assist in the identification of minority and low-income populations.
• Travel Demand Data. A select link analysis of tolling locations will identify the origins and destinations of existing drivers using the proposed toll route (currently traveling free of charge). The low-income and minority block groups identified above will be overlaid on the traffic analysis zones in the TDM, and the percentage of drivers traveling to or from low-income and minority areas will be identified for the existing condition and future "without toll" and "with toll" scenarios. Analysis of the relative changes in these scenarios will provide an indication of the extent to which low-income and minority populations are avoiding the toll.

In addition to the population information derived from the ACS and EJSCREEN data used to identify low-income and minority populations in the study areas, information from the Census Transportation Planning Products (CTPP) will be used to understand the commuter patterns of low-income and minority residents in the study areas. The CTPP provides special tabulations based on the ACS that are useful for transportation planning, including commuter flow data at varying geographic scales by mode of commute, minority status, and household income.

A qualitative assessment of the effects of tolling on small businesses located in environmental justice areas and the taxi/for-hire-vehicles industry (where drivers may include low-income and minority populations) will be performed based on knowledge of the area, coordination with knowledgeable parties, and the targeted outreach performed for this PEL Study and each tolling project.

Exhibit 46 – EJAB Environmental Justice Area Map (2015)

Exhibit 47 – Concentration of Low-Income and Minority Populations (2015)

Exhibit 48 – Concentration of Minority Populations

Exhibit 49 – Concentration of Low-Income Populations

Coordination with Knowledgeable Parties

Once demographic data has been analyzed, coordination with knowledgeable parties will be conducted to further identify low-income and minority populations in the study area, including any geographically dispersed migrant workers, homeless populations, and Native Americans. Each PennDOT District has an Environmental Justice Coordinator who is an available resource for environmental justice issues. Coordination with the Environmental Justice Coordinator and other knowledgeable parties will be performed to assist in the identification of low-income and minority populations and further supplement available demographic characteristics and field observations in understanding the characteristics of potential low-income and minority populations. These knowledgeable parties may provide additional understanding or contextual information that may be especially important in characterizing low-income and minority populations. Knowledgeable parties will be asked whether access to soup kitchens, food banks, houses of worship, advocacy groups, and other organizations that cater to minority and low-income populations (e.g., YMCA/YWCA, Big Brothers and Sisters) would be affected by implementation of the toll. Knowledgeable parties include:

• PennDOT District Environmental Justice Coordinators
• Local MPO/RPO representatives
• County planning agencies
• Local governments
• School district administrators
• Chambers of Commerce or other local business or industry associations
• Labor unions
• Pennsylvania Department of Education's Free and Reduced-Price Lunch Program and other secondary indicators of low-income populations
• Equity in Transportation Working Group members, which include civic groups and non-governmental organizations

The outreach to knowledgeable parties will seek to identify prominent church and religious leaders, additional civic/advocacy groups, and medical and health care institutions that may provide community-based points of contacts.

Field Observations

Field reviews consisting of windshield surveys (drive-through) will be performed along traffic diversion routes that have the potential for adverse impacts. Depending on the diversion routes, this effort may also be accomplished or supplemented using Google Earth. The intent of the field observations is to identify potential indicators of low-income and minority populations to supplement the available demographic characteristics in understanding the affected community. These potential indicators could include:

• Grocery stores specializing in ethnic cuisine and associated provisions
• Retail stores specializing in ethnic goods and services
• Places of worship serving ethnic groups or providing minority language services
• Identifiable public and elderly housing facilities
• Local government agencies serving special minority or low-income needs
• Local non-governmental minority or low-income advocacy organizations
• Use of non-English languages on local signs and advertising
• Local newspapers or newsletters or radio stations

Identifying and understanding the presence and importance of these indicators will provide context to the demographic data previously collected and lead to better understanding of potential effects on low-income and minority populations.

Solicit Input From Low-Income and Minority Populations

For each project, a public and agency coordination plan will be developed in consultation with the PennDOT District Community Relations Coordinator, PennDOT Central Office, and FHWA. The coordination plan will conform to the PennDOT Public Involvement Handbook and will include outreach measures targeted to low-income and minority populations. The project-specific plan will build on the outreach methods identified for this PEL Study (Appendix C) and will be tailored to project-specific conditions. In addition to traditional NEPA outreach measures, the project team may include activities in the outreach plan including, but not limited to, the following:

• Small, informal meetings in a setting that is more comfortable to a non-technical audience, with varied meeting dates and times (e.g., weekends, evenings vs. mid-day) to improve participation by those with non-traditional work schedules
• Project team participation in neighborhood events such as festivals
• Appointment of an environmental justice liaison to facilitate communication and understanding of the needs of the low-income and minority populations
• Solicitation of the support of community leaders, block captains, Chambers of Commerce, and other business groups to aid in outreach plans and execution
• Focus groups to assess the impact of tolls on low-income and minority populations
• Design and execution of surveys to assess travel behavior, including personal auto, car/vanpool, transit, and non-motorized trips (pedestrians and bicycles)
• Information sheets and inquiries in the predominate language of the community

The outreach measures adopted in the plan will depend on the size and proximity of low-income and minority populations to traffic diversion routes and the advice of community leaders to ensure use of the best techniques for outreach.

Evaluate Adverse and Beneficial Effects

Adverse effects are defined by FHWA and USDOT as "the totality of significant individual or cumulative human health or environmental effects, including interrelated social and economic effects, which may include, but are not limited to bodily impairment, infirmity, illness, or death; air, noise, and water pollution and soil contamination; destruction or disruption of human-made or natural resources; destruction or diminution of aesthetic values; destruction or disruption of community cohesion or a community's economic vitality; destruction or disruption of the availability of public and private facilities and services; vibration; adverse employment effects; displacement of persons, businesses, farms, or nonprofit organizations; increased traffic congestion, isolation, exclusion, or separation of minority or low-income individuals within a given community or from the broader community; and, the denial of, reduction in, or significant delay in the receipt of benefits of FHWA/DOT programs, policies, or activities." ⁷²

The individual project and its potential effects will be clearly articulated and evaluated in consultation with study area low-income and minority populations. Project effects will be related primarily to changes in mobility patterns and accessibility to jobs, schools, religious institutions, social visits, shopping, recreation, healthcare, and other services due to the socioeconomic impacts of implementing a toll. Adverse and beneficial effects on low-income and minority populations within the project study area will be identified in the NEPA analyses prepared for individual projects. The EJ analysis will analyze those impacts to determine whether they disproportionately impact low-income and minority populations. A brief summary of the methodologies for assessing the primary effects of bridge tolls—traffic diversion, mode diversion, and socioeconomic effects—are described below.

Traffic Diversion Analysis

The methodology proposed for the traffic diversion analysis for each specific project will be completed using traffic modeling software and refined using traffic analysis techniques as described below.

Traffic diversion consists of vehicles changing their routes to avoid paying the bridge toll. Traffic diversion routes will be identified using the appropriate TDM, which will reflect INRIX data, StreetLight data, toll, and No Action projections for an opening, intermediate, and horizon analysis year. Potential diversion routes will be identified by comparing model results for "without toll" and "with toll" scenarios coupled with knowledge and field investigation of the area roadways. The model will take into account the length of the diversion route compared to the length of the tolled road, as well as the price of the toll, travel time, and other pertinent factors that would influence a motorist's decision to divert or not to divert.

Routes to be analyzed will include those where a minimum of 100 vehicles a day would be added to the roadway. If the diversion route roadway is not limited access and has a minimum of 100 added vehicles per day, then a minimum threshold volume increase of 10 percent or addition of 500 vehicles to the daily traffic volume will be used to determine if it will be analyzed further. The routes that meet these thresholds will be analyzed under three categories—operations, crash, and roadway conditions—to identify potential adverse impacts. The methodology and characterization of impacts for the operations, crash, and roadway analyses will follow PennDOT guidelines and standards in published manuals.

For the operations evaluation, capacity analysis will be conducted to determine level of service along segments and at critical intersections along the diversion routes. The capacity analyses will be conducted for the following three conditions:

• Existing conditions
• Future conditions without toll (i.e., No-Build conditions)
• Future conditions with toll (i.e., Build conditions)

Level of service (LOS) is one metric that gauges how well a roadway segment or intersection operates. In general, LOS D is considered acceptable in urban areas, whereas LOS C is considered acceptable in rural areas. However, interpretation of the LOS metrics must take into account the operational needs based on the local context of the project. LOS will be used as a starting point in determining the effect of implementing tolls on the diversion routes. If LOS drops to an unacceptable level (based on the urban/rural rule of thumb combined with consideration of local context) under the Build conditions (implementation of a toll) compared to No-Build conditions, the route will be evaluated further to identify the specific effects. Where there are adverse effects, mitigation would be considered. Capacity-adding improvements will most likely not be considered, since adding capacity may encourage additional traffic diversion. Operational improvements such as signal timing changes, phasing changes, and lengthening of turn lanes are some of the potential operational improvements that could be considered.

For the crash evaluation, crash history will be reviewed along the diversion route roadway segments and an HSM analysis will be conducted, along with evaluation of the HSM Screening Tool available for intersections and segments. These tools will provide existing, observed, and predicted crashes for the diversion routes examined. Although there is no identified quantitative threshold that would trigger further evaluation, factors such as fatalities, serious injuries, clusters of crashes, and cost/benefit analysis of proposed mitigation strategies will be considered to determine which routes should undergo more detailed evaluation. This evaluation will be used to determine the extent to which the additional traffic resulting from diversion would worsen the crash rate or exacerbate an existing safety issue. These factors will be evaluated on a case-by-case basis to determine whether safety improvements are warranted along the diversion routes. The individual PennDOT District Traffic Engineer will be consulted on the analysis approach and results and the recommendations of the analysis.

For the roadway evaluation, pavement and roadway conditions, potential congestion or queuing problems, and potential for increasing conflicts resulting in safety issues will be evaluated to determine if the additional traffic resulting from diversion warrants potential improvements. This assessment will provide context to both the capacity analysis and the crash history evaluation.

For each diversion route analyzed, research will be done to determine if there are planned projects for the diversion routes. PennDOT's Engineering and Construction Management System website, the STIP, the PennDOT Twelve Year Program, and MPO/RPO LRTPs will be reviewed to identify any improvements along the diversion routes that could potentially impact the diversion analysis. These planned projects would be included in the traffic model used in assessing the diversion routes.

To evaluate mitigation options for impacts along diversion routes, the following could be considered and analyzed:

• Depending on the effects identified, traffic flow and safety improvements will be considered. Increasing capacity along the entire route will not be considered in order to not encourage traffic diversions and associated impacts. An example of an improvement to consider might be the addition of a left-turn lane at a traffic signal along a diversion route, where the increase in traffic due to diversion is anticipated to result in increased left turns and cause long backups at that traffic signal.
• Where improvements are considered necessary along a diversion route, the effects of these improvements on the environment will be assessed, which will include:
• Right-of-way acquisition
• Residential or business displacements
• Access issues (including bicycle and pedestrian)
• Historic properties affected
• Archaeology
• Noise and vibration (would only apply if a Type I improvement)
• Air quality
• Natural resources impacts (wetlands, streams, floodplains, threatened and endangered species)
• Park or other recreational resource impacts
• Hazardous waste effects

Mode Diversion / Public Transportation Analysis

Transit options in the study area will be mapped and described, and TDM results will be used to estimate potential effects on transit ridership due to the implementation of a toll. Transit services that operate at or near capacity during peak periods will be selected for analysis, and an estimate of the additional passenger demand under Build conditions will be provided. The frequency and convenience of transit services in existing and No-Build conditions will be summarized and the accessibility and availability of transit options in low-income and minority areas will be characterized. There are no established standards for acceptable travel time or trip reliability for modal alternatives. As a result, relative comparisons will be discussed to indicate the differences between the "with toll" and "without toll" analyses. The likelihood that the toll cost would increase the cost of public transportation will be assessed.

Social and Economic Impacts on Low-Income and Minority Populations

The socioeconomic impact analysis prepared for the NEPA documentation will assess the project's effects on community cohesion, neighborhood character, and businesses and industries that may be affected by diversion caused by the toll. Specifically, the effect on commercial traffic and businesses that may experience higher truck delivery costs, and the taxi/ for-hire-vehicle industry will be qualitatively assessed. The extent to which low-income and minority populations will be adversely affected will be described. Unavoidable tolls may impose a more substantial financial burden on low-income households than on higher income households. Low-income households unwilling or unable to pay the tolls on a regular basis may incur trip delays and travel time and travel distance penalties substantially higher than higher income households. Change in disposable income will be assessed by estimating tolls for commuter trips and be presented as a percentage of household income for low-, medium- and high-income households.

The analysis will also describe the benefits to regional economic conditions resulting from investment of the toll revenue in transportation infrastructure. The extent to which travel time savings offset the higher cost of travel will be characterized where the alternative funding option provides a more reliable travel time option for those willing to pay a toll.

Identify Disproportionate Effects

As defined by FHWA and USDOT, "disproportionately high and adverse" refers to an effect that (1) is predominately borne by a minority population and/or a low-income population; or (2) will be suffered by the minority population and/or low-income population and is appreciably more severe or greater in magnitude than the adverse effect that will be suffered by the nonminority population and/or non-low-income population. The FHWA Environmental Reference Guide states that: "disproportionately high and adverse effects" may only impact a few people, and practitioners should collect as much information as necessary from relevant sources, including input from the community, to make informed decisions.

Disproportionate impacts will be evaluated using qualitative and quantitative measures that provide meaningful comparison between low-income and minority populations and the general population. Comparisons with and without the program on both the low-income and minority population and the general population will be provided. Specifically:

• The travel demand modeling results will be used to estimate the number of trips affected by the toll that start or end trips in environmental justice areas. The percentage of total bridge trips from environmental justice areas will be provided.
• The results of the Traffic Diversion Analysis (discussed above) will be graphically depicted by mapping the intersections and roadways with adverse impacts in relation to the environmental justice areas to determine whether disproportionate impacts would occur.
• The regional vehicle-hours traveled and vehicle-miles traveled data from the TDM will be presented to understand whether overall benefits or impacts are expected to result from the project. Locally the effects on travel time due to traffic diversions will be estimated based on engineering judgement and the results of the Traffic Diversion Analysis.
• The availability, capacity, and travel reliability of the public transportation options in the environmental justice areas will be qualitatively evaluated and described.
• Mobility and accessibility effects of the toll will be qualitatively characterized as either adverse or beneficial by considering a variety of factors, including the availability of acceptable travel options, existing and No Build capacity of the transportation system, and the availability and efficiency of public transportation.
• The cost of the toll will be presented as a percent of household income for those at the poverty level versus medium- and high-income levels. The potential for the toll to result in increased costs for goods and services will be considered.
• The burden that the billing and electronic toll collection would represent for a low-income individual or family will be described.
• Comments received from targeted outreach to low-income and minority populations will be addressed in the analysis.
• For any congestion pricing proposal, transit desert zones—defined as a location that is more than 0.5 mile from a rail or subway station and 0.25 mile from a bus stop—will be identified within city limits. An estimate of the low-income and minority populations that live in transit deserts will be provided based on the CTPP data.

Identify Measures to Avoid, Minimize or Mitigate Disproportionately High and Adverse Effects

If disproportionately high and adverse effects on low-income and minority populations are identified, PennDOT will work with those populations to promote active engagement in the development of practical measures that avoid, minimize, or mitigate the impacts. Measures that could be evaluated are discussed in Chapter 8 Mitigation Strategies and will also include those suggested by community leaders and the public through the course of public outreach.

Re-Evaluate Disproportionately High and Adverse Effects and Document Decision

Disproportionately high and adverse impacts will be re-evaluated, with reasonable mitigation measures incorporated into the project using the methods described previously. Comparisons between impacts on low-income and minority populations versus the general population with and without the project will be provided.

Adverse effects and offsetting benefits will be comprehensively summarized to facilitate effective decision-making. Adverse effects on low-income and minority populations could include consideration of:

• Disruption of community cohesion/neighborhood character
• Adverse employment effects
• Displacements/decline in tax base or property values
• Increased traffic, community and other environmental impacts
• Impacts on businesses and industries
• Access to public transportation facilities
• Parking shortfalls at rail/transit stations
• Pedestrian/non-motorized potential conflicts on identified diversion routes
• Overcrowding on or increased cost of public transportation
• Increased costs of goods and services

Offsetting benefits to low-income and minority populations due to investment in transportation infrastructure could include consideration of:

• Improved safety outcomes
• Improved reliability of transportation routes
• Improved access to emergency services
• Improved access to transit
• Reduced congestion and travel times

Not implementing the toll project will also be evaluated (because the No Action alternative is required to be evaluated during NEPA). It should be noted that not building certain projects could also impact low-income or minority populations if the transportation problem to be solved continues.

After mitigation and benefits are considered, if the impacts on low-income and minority populations are no longer disproportionately high and adverse, the evaluation is complete. If disproportionately high and adverse effects remain, FHWA will determine if (1) a substantial need for the project exists, based on the overall public interest; and (2) alternatives that would have less adverse effects on protected populations have either (a) adverse social, economic, environmental, or human health impacts that are more severe; or (b) would involve increased costs of an extraordinary magnitude, in accordance with FHWA Order 6650.23.

⁶⁹U.S. DOT Environmental Justice Strategy. Return to previous place in text.

⁷⁰ In accordance with the Federal Interagency Working Group on Environmental Justice & NEPA Committee Promising Practices for EJ Methodologies in NEPA Reviews, low-income populations can be defined as persons in poverty based on the annual statistical poverty thresholds from the U.S. Census Bureau. Return to previous place in text.

⁷¹ Counties in New York and New Jersey will also be included for the bridges located in MPO districts that span two states. Return to previous place in text.

⁷² USDOT Order 5610.2(a). Return to previous place in text.

8.1 Mitigation Strategies

If the environmental review of a tolling project indicates the potential for adverse impacts, measures to mitigate those impacts will be evaluated. Successful mitigation strategies are those that:

• Avoid, minimize, or remedy the adverse effect and do not create other adverse effects that are more severe;
• Are feasible in terms of implementation and operation; and
• Are cost-effective and maintain the financial viability of the project.

Mitigation should be commensurate with the severity of the effect and should be a reasonable expenditure of public funds. Some of the measures that may be evaluated in the event that adverse impacts are expected to result from project implementation are presented below. While these potential impacts could apply to bridge tolling and congestion pricing, they would not typically apply to managed lanes, which give users the choice between a tolled lane and a GP lane.

8.1.1 Diversion Route Strategies

If adverse traffic impacts are expected to occur along a diversion route, the following options may be evaluated as mitigation strategies depending on the nature of the impacts:

1. Modify Intersection Flow:
• Add turn lanes
• Adjust signal timing
• Improve pedestrian access
2. Safety improvement projects
3. Make the diversion route less convenient:
• Implement traffic-calming methods
4. Make the tolled facility more convenient:
• Reduce traffic on the facility due to drivers switching to transit
5. Provide alternative methods of travel across the bridge:
• Provide low-cost transit options
• Provide parking/facilities for carpooling

The effectiveness of these options is highly dependent on the location of the facility, surrounding areas, user types, and the potential impacts to users.

8.1.2 Strategies to Mitigate Financial Impact to Low-Income Populations

Tolls may represent a financial burden on low-income individuals who need to use a tolled facility frequently. Mitigation strategies should be considered where disproportionately high and adverse effects are identified. Tolls present a greater burden on low-income households because they represent a larger percentage of total income compared to middle- and high-income households. Additionally, low-income households are less likely to have a credit card or bank account to fund a tolling account, or front the funding to sign-up and maintain a minimum balance on their E-ZPass account.

Current Toll Payment Methods in Pennsylvania

To develop potential mitigation strategies, it is necessary to first understand the current toll payment methods and policies in Pennsylvania. With AET or open road tolling, an overhead gantry with cameras and detectors is used to allow high-speed toll collection. This detection/camera system registers E-ZPass toll tags or capture images of license plates when an E-ZPass tag is not detected. If the vehicle is not registered to an E-ZPass account or a transponder is not detected, the owner of the vehicle is mailed a bill as a "Toll-by-Plate" transaction.

E-ZPass Accounts and Policies

E-ZPass is an electronic toll collection system used on many toll facilities in the midwest and eastern United States. Drivers typically sign up for an account with their local toll road operator or Department of Transportation and attach a transponder to their windshield. As the vehicle travels through a tolling point, the system identifies the vehicle through the E-ZPass transponder and posts the toll to the user's account. The PTC operates the E-ZPass system in Pennsylvania and has a customer service center that manages accounts, issues tags, and provides customer service.

An E-ZPass account is operationally the easiest way to pay tolls. Using an E-Zpass account also costs less than a Toll-by-Plate bill, which requires additional administrative work and therefore includes a surcharge. To open an E-ZPass account online, a driver's license, license plate number, credit card (or other electronic payment), address, and email address are required. An account requires a pre-paid toll deposit from which tolls are withdrawn as transactions are incurred by the user.

Automatic Replenishment: an account that has a credit card, debit card, or bank account linked for automatic withdrawals as the pre-paid account balance is drawn down.

• Account Opening: $38 for each transponder
• $3 non-refundable annual service fee for each transponder
• $35 pre-paid toll deposit for each transponder
• Pre-paid toll balance requirement: $10 and $45
• When the pre-paid balance reaches $10 or less, an automatic payment of $35 will be deducted from the payment method.
• The amount will automatically adjust to match average monthly usage.
• Accounts can be managed or paid:
• Online with a credit card, debit card, or checking account
• In person at a customer service center using any payment method, including cash and check, to replenish their accounts
• By mail with a credit card, debit card, or check

Manual Replenishment: an account from which no automatic withdrawals are made to replenish the pre-paid toll balance, and a manual payment by cash, credit card, or check must be made by the customer. This is the type of account a low-income, unbanked, or under-banked customer is more likely to use for cash payments. An underbanked person is typically one who may have a bank account used primarily for alternative financial services such as short-term payday loans and check cashing services. Unbanked people are those who do not use banks or financial services at all.

• Account Opening: $48 for each transponder
• $3 non-refundable service fee for each transponder
• $10 deposit for each transponder
• $35 pre-paid toll deposit for each transponder
• Pre-paid toll balance requirement: $15 and $50
• When the pre-paid balance reaches $15 or less per transponder, the E-ZPass terms and conditions require a user to make a manual payment of $35.
• Accounts can be managed or paid:
• Online with a credit card, debit card, or checking account
• In person at a customer service center using any payment method, including cash and check, to replenish their accounts
• By mail with a credit card, debit card, or check

Toll-by-Plate

Without an E-ZPass account, a toll is issued based on the vehicle's license plate (Exhibit 50). An image is captured and read, the license plate is used to obtain an address, and a bill is mailed to the registered owner. The bill must be paid within 20 days. The toll rate charged for Toll-by-Plate is higher than the E-ZPass rate due to the higher cost of mailing/emailing notices and processing image-based transactions associated with Toll-by-Plate.

Toll-by-Plate transactions can be paid:

• Online with a credit card, debit card, or checking account
• In person at a customer service center using any payment method, including cash and check, to replenish their accounts
• By mail with a credit card, debit card, or check

Alternatively, a customer can sign up for a Toll-by-Plate account. This account type does not require an E-ZPass or pre-paid toll balance. Instead, the owner is automatically billed using the payment method on file. The advantage with this type of account is that the user does not pay the full Toll-by-Plate surcharge (15 percent discount from the Toll-by-Plate rate). Because the user registers their address, the address does not need to be looked up, and mail does not need to be sent. This method still has a surcharge over E-ZPass, however.

Financial Impact Mitigation Options

If adverse financial impacts are expected to occur to low-income populations, the following mitigation options could be evaluated along with others identified during specific projects:

1. Make E-ZPass transponders more accessible for low-income users
2. Support reduced costs and/or fees on E-ZPass and non-E-ZPass accounts for low-income users
3. Create a retail account replenishment program allowing cash-based customers easy access to account replenishments or payment of Toll-by-Plate transactions.
4. Provide outreach to educate the impacted population on toll payment methods and options to prevent violations.
5. Provide alternative methods of travel across the bridge to reduce the need to use the facility with their own vehicle and thus avoid the decision to divert entirely by adding:
• o Low-cost transit options
• o Parking/facilities for carpooling
6. Provide a toll rate adjustment for a specific disproportionately high and adversely impacted population.

8.2 Mitigation Evaluation

If it is determined that tolling results in adverse effects on communities along diversion routes, or that the toll itself adversely affects low-income or minority populations, mitigation to offset those effects should be considered. The approach to mitigating an adverse effect of tolling should be considered in the context of the specific project and the effectiveness of the mitigation measure in that specific context.

At the project level, if a disproportionately high and adverse effect on minority and/or low-income populations is identified, the potential mitigation strategies discussed above should be evaluated, along with others that may be developed as part of the project evaluation and public engagement. Each mitigation strategy should be analyzed for its ability to offset the negative effects on the impacted population(s).

The evaluation approaches presented in the following sections are guidelines that should be customized for each project being evaluated. Additional factors may be considered in addition to those presented.

8.2.1 Diversion Routes Impact Mitigation Evaluation

To evaluate the diversion mitigation options discussed above and their ability to address the community impacts, including but not limited to those on low-income and minority populations, the following factors should be considered:

The degree to which the mitigation measure reduces or minimizes the impact;

• The feasibility for implementation; and
• The environmental effects of implementing the mitigation measure

A sample evaluation table is shown in Exhibit 51.

Exhibit 51 – Potential Diversion Route Mitigation Evaluation

8.2.2 Financial Impact Mitigation Evaluation

To evaluate the financial impact mitigation options discussed above to address the impacts of

financial burdens on low-income communities, the following factors should be considered:

• The degree to which the mitigation measure reduces or minimizes the impact;
• The feasibility of implementation; and
• The cost-efficacy of the mitigation option.

A sample evaluation table is shown in Exhibit 52.

Exhibit 52 – Potential Financial Impact Mitigation Evaluation