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PennDOT estimating nearly $1 billion in revenue losses due to COVID-19 shutdowns

PennDOT has lost critical sources of funding from the state gas and diesel tax, plus certain licensing and registration fees.

HARRISBURG, Pa. — The COVID-19 pandemic could end up having a massive impact on Pennsylvania's infrastructure. Officials with the Pennsylvania Department of Transportation (PennDOT) estimate nearly $1 billion in losses. The total estimated dollars lost are based on an impact into late summer. 

Program areas that will be impacted include highway and bridge construction, local funding, municipal traffic signals, and contract services such as mowing contracts.

Due to COVID-19 shutdown orders, PennDOT has lost critical sources of funding from the state gas and diesel tax and certain licensing and registration fees. Department officials estimate losses between $800 million and $900 million.

“We’re becoming more cautious and we are evaluating the critical versus non-critical projects that were in the pipeline,” Acting Transportation Secretary, Yassmin Gramian, has said.

Since March 4, there has been a 37 percent drop in traffic on main highways in PennDOT’s Engineering District 8, which includes Adams, Cumberland, Dauphin, Franklin, Lancaster, Lebanon, Perry and York counties. This area has also seen a 49 percent drop in traffic on arterial routes, according to a department spokesperson.

It would seem significantly low gas prices are still not enough to lure drivers to the pump. According to AAA, the average gas price per gallon in Pennsylvania is $2.24, which about 75 cents lower than what it was a year ago. PennDOT officials said their gas tax revenue has fallen 30 percent—which is roughly $90 million.

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However, it was clear long before the COVID-19 pandemic that PennDOT could no longer rely on the gas tax to meet the state’s highway and bridge needs, a department spokesperson said. Transportation officials are urging the federal government to take meaningful action on infrastructure spending.

“If we do not receive any support from the federal government, then we need to reevaluate our program. This is impacting all aspects, not just construction, but so many other aspects of our business,” explained Acting Secretary Gramian. “So, we’re preparing ourselves for the best case scenario and the worst case scenario."

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Transit agencies and public transportation providers across the state had significant unmet infrastructure and services needs before COVID-19 impacted the state. It remains to be seen how or whether the federal stimulus will offset these losses.

According to PennDOT, major revenue sources that will be impacted include:

Gas & Diesel Tax, Certain Licensing and Registration Fees

• Estimated Dollar Loss - $800 - $900 million

• Program Areas Impacts

o Highway and Bridge Construction

▪ Construction program - large reductions will be needed to align with current revenue expectations

▪ Stimulus funds could replace some of the reduced program depicted

▪ Stimulus funds could also create opportunity to advance an expanded program

o Highway Maintenance

▪ Lower standard of care as focus shifts to solely basic maintenance needs

▪ Reduction in contract services (such as mowing contracts)

▪ Significant reduction in the number of resurfacing projects which can be

funded

▪ Reduction of resurfacing will result in more lower level treatments such as patching vs. surface treatments, crack sealing and seal coats vs paving.

o Municipal and Local Funding – liquid fuels revenue will be down, so distributions will also be less

o PA Turnpike transfers revenue to PennDOT for gas taxes, this will also be lower

o PennDOT facilities

▪ Less revenue will be available for needed improvements and repairs

o Municipal Traffic Signals – less revenue will be available for these programs

o Driver & Vehicle Services

 Sales Tax, PA Lottery Proceeds, Vehicle Rentals, Vehicle Leases, Tire Tax

• Estimated Dollar Loss - $80 million

• Program Areas Impacted

o Public Transportation – direct reduction in distribution

Certain Multimodal Fees

• Funding from the Turnpike supports transit capital investments, including those needed for the Amtrak service used by more than 1 million riders annually. Half of the state’s subsidy of the Amtrak service is supported by Turnpike payments.

• Estimated Dollar Loss - $30 million

• Program Areas Impacted by resulting reductions in funding distribution

o Public Transportation

o Rail Freight

o Ports

o Bicycle & Pedestrian

o Pennsylvania Ports

o Aviation

o Multimodal Related Highway Projects

o DCED – CFA Multimodal Projects