Pennsylvania’s transit funding debate has put Philadelphia and its surrounding counties in an impossible position.

The five southeastern counties are home to about 32 percent of PA residents, and contribute around 40 percent of the state’s tax dollars while consuming just 5 percent of the state’s land area. The Philly region is an economic powerhouse unlike any other place in the Commonwealth.

But with the reality of split-party control of the state legislature, lawmakers from around the state are empowered to take advantage of the Philadelphia region alternately as a piggybank and a punching bag.

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In the case of transit, Senate Republican leaders Joe Pittman and Kim Ward and others in their caucus do not want to fund transit at the state’s historic spending levels — even though the largest share of “their” money is actually our money. The graph below shows the historic funding levels:

On top of that, state government has not allowed counties to tax themselves locally to invest in transit, whether to backfill state cuts, or to level up our region’s investments over and above the historic state baseline.

In sum: Our region subsidizes everybody else, but we have limited power to get what we need from the state, or even to marshall our own local resources to fund what they won’t.

This arrangement is merely obnoxious under normal circumstances, but it’s become intolerable as the western PA representatives try to break our region on purpose, and appear to get a kick out of it as everybody in the southeast, from parents of young children to sports fans, braces for transportation chaos in our daily lives starting next week.

It has reached a level of unfairness that is so politically explosive and unsustainable that it threatens to tear apart the entire “Commonwealth” approach to government in PA.

State-level urban Democrats have rarely tried to challenge the big state cross-subsidy issue head-on, and have historically been more focused on trying to get their own priorities funded in spite of it. But the specter of transit austerity has dragged the core unfairness of it all out in the open, and voters in our region are pissed.

This sentiment is everywhere on Philly social media: If the state government won’t fund our region’s priorities, when we are their largest funder, then we should take our ball and go home, or even try to secede as a region.

Southeastern Dems start hitting back

Rep. Melissa Shusterman of Chester County is the first lawmaker to introduce legislation born out of this vibe shift, which aims to devolve state transportation spending and other classes of spending down to regions according to the share of state tax revenue they contribute.

Rep. Shusteman plans to introduce a bill in the coming weeks indexing counties into three tiers based on their share of state tax revenue, population, and other factors. These regions would receive back a portion of their state tax revenue in accordance with their contributions, and would be able to fund what they please. In the Southeast, transit spending will naturally receive higher priority than in places like Indiana County, which Senator Pittman represents, and that’s all well and good.

Our region subsidizes everybody else, but we have limited power to get what we need from the state, or even to marshall our own local resources to fund what they won’t.

“You know, we fund the roads and bridges that rural PA uses for transportation,” said Rep. Shusterman in an interview, “And we’ve been on board with that — it’s been a sense of pride.”

“But we need to be able to keep enough of that funding to ensure that our own mass transit runs so our regional economy can continue to drive the state economy. We are not OK with our tax dollars going to the rest of the state while we make transit cuts. That is why I created the legislation.”

Clearly, this legislation would have a hard time passing for the same political geography reasons that transit funding is having a hard time, and Rep. Shusterman is indulging in a little justified trolling here.

The way Shusterman frames it is that she’s listened to her Republican colleagues and heard loud and clear they don’t want to subsidize the southeast, so this bill would ensure their tax money would stay local, and so would ours.

Country mice and city mice, right? But it isn’t just that different regions would have more flexibility to pursue their own priorities — Shusterman’s legislation would entail a big redistribution of funds away from more sparsely populated rural districts and back into the big metro regions where the funds are overwhelmingly generated.

One of the central mythologies of Republican politics in PA is that the good and virtuous people of the hinterlands subsidize the bad nasty people in the cities — an exact reversal of fiscal reality. So it’s a bit of a cheeky move by Shusterman daring them to mark this rhetoric to market.

But speaking with Rep. Shusterman, it’s clear she’s quite earnest about finding a solution that accounts for different regions’ needs, and she thinks devolution of transportation funding could be a workable solution for a pluralistic state like ours with many different kinds of communities.

Devolution derby

PennDOT says they have a $9 billion annual deficit, but this total includes both state of good repair projects and also a lot of road and highway capacity expansion projects of dubious value from a statewide perspective. What is truly in the state’s interest to fund, and how do they set priorities?

In a state as large and geographically diverse as PA, this is a hard question to answer, and the way the state approaches it today is by just not really doing much heavy-handed prioritization at all. There’s a potentially endless wishlist of transportation investments people might want to pursue that there will never be enough money to fund, but there’s nobody really empowered to say no.

Depending on how it’s structured, devolution of transportation taxes and spending to the regional level could be a big improvement over the status quo. Rather than continuing on with the impossible task of trying to adjudicate this all from the state level, the state could give regions their share of the tax money back — along with some new options for taxing themselves locally, too — and limit the state’s role to dealing with state highways crossing multiple counties.

The best solution would likely involve the creation of more county or multi-county police departments, and a transition away from state funding to more county funding over time. 

We’ll soon learn more about the exact proposal when the legislation comes out, but one could imagine a scenario where the state redraws the PennDOT districts, cutting the number down from 12 to 8 or so. PennDOT’s budget could be cut in half, and redistributed to the districts based on each region’s share of the tax revenue. There’s already a Republican bill from House member Perry Stambaugh aiming to redraw PennDOT districts that could be a vehicle for such a move.

Even easier, the state already has a system of Metropolitan Planning Organizations (MPOs) like the Delaware Valley Regional Planning Commission whose boards feature a who’s-who of municipal elected officials and state appointees. MPOs already receive federal funding and have the power to select and fund transportation projects of regional significance. An expansion of MPOs as an overseer of more state and local transportation revenue would be one of the more intuitive ways to go about this without reinventing the wheel.

Such a move would empower regions to choose what is truly important to fund, while forcing everybody to sharpen their pencils a little more as they set priorities with a limited pot of funding.

What other spending should we devolve?

Rep. Shusterman’s press release also mentions some other services as possible candidates for devolution, including education, healthcare, parks and recreation, and law enforcement. It’s important to think about these things separately on their own terms.

A debate over the appropriate level of government for providing different services or levying different kinds of taxes is always welcome, but some of these suggestions don’t quite fit the bill.

For example, groups like the Public Interest Law Center and Education Law Center finally won a PA Supreme Court case that will move us away from relying on more local or regional education funding sources, and toward a bigger role for state government in distributing education funding through a formula. There’s general agreement among liberal reformers in the school funding space that a state formula is the most equitable, while relying more on local funding perpetuates unequal access to resources between school districts.

Similarly, items like healthcare and state park spending seem like issues of statewide importance, and could get really thorny politically for Democrats. The best items to target for devolution may fall under the banners of economic development — inclusive of transportation and infrastructure — and law enforcement.

Fixing the state police free-rider problem

State police spending in particular has an important connection to the transportation funding debate, because the state police organizationally live within PennDOT, and their budget has been eating up a larger and larger share of the PennDOT budget since the Act 89 transportation funding law passed in 2013.

State elected officials have been complaining about this for years, having taken a contentious vote to raise the state gas tax only to see hundreds of millions of dollars for police leaking out of the transportation projects bucket. Governor Shapiro has proposed scaling down Motor License Fund payments to the state police to zero by 2029.

Rep. Shusterman … thinks devolution of transportation funding could be a workable solution for a pluralistic state like ours with many different kinds of communities.

About two-thirds of PA municipalities do not operate a municipal police department and rely instead on the state highway patrols for their local policing needs. It’s a free-rider problem that is only getting worse, with additional municipalities like Sweden township and Montgomery borough disbanding their police departments in just the last few years. Local police coverage now takes up over half of the state police budget.

This is another egregious and unsustainable transfer of resources from urban areas to exurban and rural places, made worse by the fact that rogue municipalities are fully in control of whether the state is forced to spend more resources on them when they dump their local police force. Can you imagine the outcry if Philadelphia tried to do this?

It’s well-past time to admit that the state is in over its head here, and begin looking at regional solutions to defray the cost for the state. It’s unfair in the extreme that taxpayers in one-third of the state — the most urbanized parts — are on the hook for their own expensive local police services and the state police bills for the other two-thirds of municipalities who get a free ride.

The Wolf administration briefly pursued a solution to this issue in their 2019 executive budget proposal, suggesting a sliding-scale fee for municipalities who rely solely on state police for their coverage. That proposal was estimated to raise around $104 million — less than a fifth of the actual cost of providing the service, but still something. That idea went nowhere, but with intra-regional resentment running at an all-time high, southeastern state representatives might want to pick up where Wolf left off.

The best solution would likely involve the creation of more county or multi-county police departments, and a transition away from state funding to more county funding over time. However it’s organized, the most important thing is to finally get the state police out of the PennDOT budget so that we can spend a lot more of our transportation money on actual transportation. And we can free up even more state tax money by ending the unfair state police free-rider problem through more regional police departments.

Liberal redistribution vs. consenting to robbery

There’s a difference between generosity and getting robbed, and right now we’re getting robbed.

As the largest funder of the state budget, and one of the only growing regions of the state, southeastern PA and its representatives need to stand up for our interests, and begin considering more bold and creative solutions like this to ensure that our region’s critical needs — including transit funding — are adequately taken care of first.

Regional political warfare is already happening whether we like it or not. It’s time for the southeast delegation to take a page from Rep. Shusterman and finally join the fight in earnest.

Correction: The five southeastern counties are home to about 32 percent of PA residents.

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