3.2.26 - Senate Transportation Budget Hearing

Senate Budget Hearing: Department of Transportation (PennDOT) — Part 1

Hearing overview

The committee convened to take budget and program testimony from the Pennsylvania Department of Transportation (PennDOT). Secretary Mike Carroll appeared with senior staff including Executive Deputy Secretary Larry Shiflet, Deputy Secretary for Administration Cory Pellington, and Deputy Secretary for Multimodal Transportation Meredith Bajka (among others).

Discussion centered heavily on public transit funding and governance, especially the Public Transportation Trust Fund (PTTF), transit agency project delivery backlogs, and how PennDOT and the legislature should treat capital balances vs. operating shortfalls. Members also raised broader transportation priorities and pressures, including funding structure, project timelines, and program accountability. No votes were taken.

Budget context and opening testimony

PennDOT provided an overview of the department’s budget and responsibilities. Early in the hearing, a top-line figure was stated for PennDOT’s total budget: $11.4 billion in total funds, including $2.8 billion from the Motor License Fund.

The hearing then transitioned quickly into committee questioning—dominated by the status, use, and growth of the Public Transportation Trust Fund and the committee’s concerns about whether existing dollars are being spent effectively and whether statutory structure is aligned with current transit needs.

Major issues discussed and Q&A highlights

1) Public Transportation Trust Fund: balance growth, “unused” capital, and operating crises

Who raised it: Senate leadership and committee members (notably Leader Pittman, followed by chairs and other members).
Core questions/claims raised by members:

• Members cited a PTTF balance of roughly $1.0B in 2020, compared with ~$2.4B “today,” and noted that when Governor Shapiro took office the balance was cited as ~$1.6B, implying ~$800M growth during the administration’s tenure.
• Members contrasted a large PTTF balance with transit agency claims of massive need—specifically citing SEPTA’s reported backlog of $5.1B—and asked how both can be true at the same time.
• Members argued that “cash in the fund” suggests either (a) agencies are not delivering projects, (b) allocations are not being drawn down, or (c) the structure of the program is misaligned with urgent operating needs.

PennDOT responses (Secretary Carroll and team):

• PennDOT emphasized the PTTF contains funding for a wide range of purposes and time horizons, describing the funds as tied to capital and service projects on the forward/long-term horizon, not simply immediate “spendable cash.”
• On specific member-cited “unspent” figures, PennDOT frequently did not confirm the precise totals in the moment and committed to verifying numbers (for example, PennDOT stated it could not confirm a member’s cited $859M figure for SEPTA’s unspent capital balance and said it would need to check).
• PennDOT acknowledged the fund receives significant annual inflows (members referenced ~$2B annually into the PTTF) and described the balance as reflecting both program structure and project timelines.

Key flashpoints inside this topic:

• Members repeatedly pressed whether the fund balance is effectively “proof” that agencies are not delivering projects fast enough to meet needs.
• PennDOT pushed back on conclusory interpretations, pointing to statutory structure, project pipelines, and the difference between appropriated allocations, available balances, and deliverable project schedules.

2) PRT and SEPTA: statutory allocations, delivery capacity, and “money left on the table”

Who raised it: Leader Pittman and members focused on Philadelphia-area transit outcomes.
Member assertions/questions:

• Members pointed to the statutory formula for PRT (Pittsburgh Regional Transit), stating that PRT is prescribed to receive $250M annually for certain purposes, then asserted that over the last 10 years PRT had left $250M “on the table” (in other words, allocations not drawn down/spent).
• Members pressed the implication: if PRT claims needs but also has large balances, is the constraint actually delivery capacity rather than lack of funding?

PennDOT responses:

• PennDOT acknowledged the $250M figure as a checkable reference point and indicated it would validate specifics, but the exchange made clear PennDOT views delivery timelines and execution capacity as central to how quickly capital dollars can be deployed.
• PennDOT did not accept all member characterizations as definitive, but did not dispute the general idea that project delivery and pipeline readiness can slow drawdown even when allocations exist.

SEPTA-specific exchange:

• Members cited a figure of roughly $850M (and also $859M) as SEPTA capital dollars sitting unspent, while SEPTA also asserts a multi-billion-dollar backlog.
• PennDOT stated the cited $859M number was higher than the figure they were familiar with and would require verification.

3) “Hold harmless reserve,” fund “flexes,” and disputes about what actions mean

Who raised it: Leader Pittman (continued) and additional members as questioning evolved.
Member questions:

• Members referenced prior testimony about a hold harmless reserve and asserted it had been described as ~$200M at an earlier point (members referenced July), and asked why it was now being described as ~$400M.
• Members also discussed the Governor’s prior actions involving the PTTF, including references to “flexing” funds and a specific reference to the Silverliner railcar context.

PennDOT responses:

• PennDOT provided at least one timestamped balance reference: on November 22, 2024, the PTTF balance was approximately $2.3B.
• On the characterization of actions as a “flex” versus something else, PennDOT disputed at least one member framing directly (“That’s not a flex…”), underscoring that how the fund is used—and how transfers/allocations are categorized—matters legally and programmatically.

Notable dynamic:
This portion of the hearing featured some of the most pointed back-and-forth, with members challenging whether PennDOT’s testimony aligned with legislative language and whether PennDOT had fully engaged with specific legislative text under discussion.

4) Transit accountability: who is responsible for what (PennDOT vs. transit agencies)

Who raised it: Multiple members, including Senator Carney and others focused on SEPTA/PRT.
Key line of questioning:

• Members explicitly pressed PennDOT on the limits of its authority and responsibility, noting (in essence) that PennDOT is not “the director” of certain transit agencies—while also asking what levers PennDOT does have to ensure performance, accountability, and timely delivery.
• Members returned repeatedly to the practical question: if the PTTF has grown and agencies report unmet needs, what changes will ensure faster delivery, better project selection, and clearer financial transparency?

PennDOT responses:

• PennDOT acknowledged constraints and repeatedly emphasized the need to verify figures and interpret balances correctly (capital vs. operating, statutory formula effects, project timelines).
• PennDOT framed the issue as one of project readiness, pipeline maturity, procurement realities, and long-horizon commitments—not simply “money sitting unused.”

Other topics that surfaced in the hearing

Part 1 was overwhelmingly dominated by the PTTF/transit debate, but the transcript also includes broader transportation references—particularly where members signaled they would carry questions into “part 2” or later segments (the chair sequence and remarks indicate the hearing was structured across parts). Where raised, members signaled ongoing concerns around:

• How Pennsylvania balances capital investment versus near-term operating needs in transit.
• How to measure and enforce project delivery performance when large backlogs are cited.
• Whether the statutory structure of transit funding is producing unintended outcomes (large balances alongside urgent needs claims).

Key takeaways for readers

• The hearing’s core tension was simple but unresolved: why does the PTTF balance keep rising while transit agencies cite enormous backlogs and urgent needs?
• Members repeatedly argued the balance suggests under-delivery or mismanagement; PennDOT emphasized project timelines, statutory structure, and the difference between “allocated,” “available,” and “deliverable.”
• Several specific figures became focal points—PTTF ~$2.4B, cited growth of ~$800M, SEPTA backlog $5.1B, and disputed/uncertain unspent-balance figures (e.g., $850M–$859M cited by members but not confirmed on the spot by PennDOT).
• The hearing built a record for future budget and policy negotiations, especially around transit accountability, the proper use of PTTF dollars, and whether reforms are needed to align funding structure with real-world delivery capacity and service needs.

Focus: Transit structural reform, highway funding pressures, federal uncertainty, and long-term sustainability

Part 2 of the Senate Transportation budget hearing continued the intense focus on public transit funding, but expanded the discussion into broader transportation finance structure, federal fund stability, highway program pressures, and the long-term sustainability of Pennsylvania’s transportation model.

Secretary Mike Carroll and senior PennDOT leadership remained before the committee. The tone in Part 2 remained analytical but pointed, with sustained scrutiny over financial balances, spending timelines, and structural reform options. No votes were taken.

1) Public Transportation Trust Fund: structural vs. operational problem

Part 2 opened with continued questioning about the Public Transportation Trust Fund (PTTF) and whether the issue facing Pennsylvania transit agencies is:

• A lack of funding,
• A structural mismatch between capital and operating dollars,
• Or an execution/delivery bottleneck.

Key themes from members:

• If the PTTF balance exceeds $2 billion while agencies claim service crises, is the crisis truly financial—or structural?
• Are capital dollars accumulating because projects are not being advanced?
• Should the legislature consider statutory reforms to change how PTTF dollars can be used?

PennDOT’s framing:

PennDOT reiterated distinctions between:

• Allocated funds
• Available balances
• Multi-year capital commitments
• Operating subsidies
• Federal match requirements

The department emphasized that capital balances are not equivalent to liquid, unrestricted operating dollars. Transit projects often span multiple fiscal years, require environmental and engineering work, and depend on federal matches. The presence of a fund balance does not mean the money is idle or freely reprogrammable.

However, members clearly signaled that future legislative discussions may focus on whether statutory changes are needed to better align the fund’s design with present-day transit needs.

2) SEPTA, PRT, and delivery capacity scrutiny

Part 2 continued the examination of SEPTA and Pittsburgh Regional Transit (PRT).

Members again raised concerns about:

• Multi-billion-dollar capital backlogs
• Significant reported unspent balances
• Long project delivery timelines

Several senators pressed whether project delivery capacity—rather than raw funding—may be the limiting factor.

PennDOT did not dispute that delivery timelines can be long but reiterated that:

• Major infrastructure projects require extensive procurement and compliance steps.
• Federal processes contribute to delays.
• Not all “balance” figures represent discretionary dollars.

The exchange underscored an emerging policy question: Should Pennsylvania focus more on improving project delivery systems and performance metrics rather than increasing topline funding?

3) Federal funding uncertainty and risk exposure

Part 2 expanded into discussion of federal transportation funding reliability.

Members asked about:

• Risks if federal transportation funding declines.
• Dependence on IIJA (Infrastructure Investment and Jobs Act) funding.
• What contingency planning PennDOT has in place.

PennDOT acknowledged:

• Federal funds are critical to Pennsylvania’s highway and bridge program.
• Many large capital projects rely on predictable federal participation.
• Any reduction or delay in federal funds would materially affect project schedules and obligations.

The department indicated ongoing monitoring of federal program stability and emphasized the importance of maintaining strong federal partnerships.

This portion of the hearing broadened the frame from transit-specific concerns to statewide infrastructure risk.

4) Highway and bridge program pressures

Members shifted discussion toward the core highway and bridge network.

Key questions included:

• Whether current revenue streams are sufficient to maintain the state’s large inventory of bridges.
• How inflation has affected project costs.
• Whether PennDOT is deferring maintenance due to cost escalation.

PennDOT acknowledged cost pressures from:

• Construction inflation.
• Supply chain volatility.
• Labor market constraints.

The department stressed the importance of predictable funding streams to prevent deterioration cycles that ultimately cost more long-term.

While transit funding dominated the earlier portions of the hearing, Part 2 reinforced that the highway network faces its own structural funding pressures.

5) Revenue structure and long-term sustainability

Several senators turned to long-term transportation funding reform.

Issues raised included:

• The declining purchasing power of the gas tax due to fuel efficiency.
• The long-term viability of Act 44 / Act 89 funding structures.
• Whether Pennsylvania must eventually revisit comprehensive transportation revenue reform.

PennDOT did not advocate a specific legislative solution but acknowledged:

• Vehicle electrification and fuel efficiency trends will continue to erode traditional revenue streams.
• Long-term structural conversations are necessary.

Members made clear that any future transit funding increase discussions will likely be tied to broader revenue and accountability reforms.

6) Governance and accountability

Part 2 included pointed exchanges about governance.

Members pressed:

• What authority PennDOT has over transit agency oversight.
• Whether PennDOT can require performance benchmarks.
• How the legislature should interpret “oversight” vs. “control.”

PennDOT clarified that:

• Transit agencies have independent governance structures.
• PennDOT administers funding consistent with statutory frameworks.
• Structural reform would require legislative action.

This reinforced a key theme of the hearing: if lawmakers want different outcomes in transit performance or spending flexibility, statutory change—not administrative adjustment—may be required.

7) Tone and legislative direction

While no votes were taken, the tone of Part 2 suggested several likely legislative directions:

• Increased scrutiny of PTTF balances.
• Possible statutory amendments to transit funding structure.
• Expanded accountability requirements for agencies receiving large allocations.
• Broader transportation funding reform discussions beyond transit.

Members signaled that funding increases will be difficult to justify without clearer explanations of balances and delivery timelines.

Key takeaways from Part 2

• The Senate is not persuaded that transit’s challenges are purely a funding shortage; many members believe structural and delivery issues must be addressed.
• PennDOT emphasized legal and financial distinctions between “balance” and “spendable operating cash.”
• Federal funding stability is a significant risk factor for Pennsylvania’s infrastructure pipeline.
• Long-term transportation revenue reform is increasingly unavoidable due to declining gas tax purchasing power.
• The hearing laid groundwork for potentially significant statutory reform conversations in upcoming sessions.

Senate Budget Hearing Recap: PennDOT Under Scrutiny Over Transit Funding, Trust Fund Balances, and Long-Term Sustainability

The Senate Transportation Committee convened for a two-part budget hearing with the Pennsylvania Department of Transportation (PennDOT), led by Secretary Mike Carroll and senior leadership.

Across both sessions, lawmakers engaged in sustained and pointed questioning—particularly around the Public Transportation Trust Fund (PTTF), transit agency capital balances, project delivery timelines, and long-term transportation revenue sustainability.

No votes were taken. However, the hearing laid significant groundwork for future legislative debates on transit reform and transportation funding structure.

Budget Overview and Opening Context

At the outset, PennDOT outlined the scale of its operations:

• Total budget: Approximately $11.4 billion
• Motor License Fund portion: Approximately $2.8 billion

The hearing quickly pivoted toward transit—specifically the structure and balance of the Public Transportation Trust Fund (PTTF).

The Core Question: Why Is the Trust Fund Growing During a Transit “Crisis”?

The central tension of the hearing was repeated across both parts:

If transit agencies report severe funding shortfalls and capital backlogs, why has the Public Transportation Trust Fund balance grown to over $2 billion?

Members cited figures including:

• A PTTF balance of roughly $1.0 billion in 2020
• Approximately $1.6 billion when Governor Shapiro took office
• Approximately $2.3–$2.4 billion currently
• An annual inflow of roughly $2 billion into the PTTF
• SEPTA’s reported capital backlog of $5.1 billion
• Member-cited unspent SEPTA capital balances of approximately $850–$859 million

Lawmakers repeatedly pressed PennDOT on how these numbers can coexist.

PennDOT’s Position: Capital Balance ≠ Available Operating Cash

Secretary Carroll and PennDOT leadership emphasized several distinctions:

• Allocated funds are not the same as unrestricted cash.
• Capital dollars are tied to multi-year projects.
• Many projects depend on federal match requirements.
• Project delivery timelines involve engineering, procurement, environmental review, and federal compliance.
• The presence of a fund balance does not mean dollars are idle or immediately reprogrammable.

PennDOT declined to confirm certain specific “unspent” figures cited by members during questioning and committed to verifying those numbers.

Still, senators clearly signaled skepticism that structure alone explains the growing balance.

SEPTA and PRT: Delivery Capacity Under the Microscope

A major focus was the performance and delivery capacity of:

• SEPTA
• Pittsburgh Regional Transit (PRT)

Members asserted:

• PRT is statutorily eligible for roughly $250 million annually, and over a decade may have left substantial allocations unused.
• SEPTA cites multi-billion-dollar needs while reportedly carrying significant balances.

The underlying question raised repeatedly:
Is the problem insufficient funding—or insufficient delivery capacity?

PennDOT acknowledged project timelines can be long and that delivery capacity plays a role but emphasized that balances must be understood within statutory and project-cycle contexts.

This exchange signals that future debates may shift from “how much funding?” to “how effectively is funding deployed?”

Hold Harmless Reserves and Fund “Flexing”

Members questioned:

• Changes in the reported size of “hold harmless” reserves (cited as roughly $200 million previously and approximately $400 million more recently).
• Whether certain past funding maneuvers constituted “flexing” of PTTF dollars.

PennDOT provided a specific reference point that as of November 22, 2024, the PTTF balance was approximately $2.3 billion.

The department pushed back on certain characterizations, arguing that how transfers and allocations are categorized matters legally and programmatically.

The exchange reflected broader tension about transparency, definitions, and statutory interpretation.

Governance and Accountability: Who Controls Transit?

Several senators pressed PennDOT on the limits of its authority over transit agencies.

PennDOT clarified:

• Transit agencies operate under independent governance structures.
• PennDOT administers funding pursuant to statute.
• Structural reforms would require legislative changes.

This reinforced a major theme:
If lawmakers want different performance outcomes or funding flexibility, statutory amendments—not administrative action—would be required.

Federal Funding Risk and Exposure

Part 2 expanded the lens to federal transportation funding.

Members asked:

• What happens if federal funding declines?
• How reliant is Pennsylvania on IIJA (Infrastructure Investment and Jobs Act) funds?
• What contingency planning exists?

PennDOT acknowledged:

• Federal participation is critical for highways, bridges, and major capital projects.
• Reduced or delayed federal funding would materially affect Pennsylvania’s project pipeline.
• Ongoing monitoring of federal stability is necessary.

This portion of the hearing underscored the broader risk landscape beyond transit alone.

Highway and Bridge Funding Pressures

While transit dominated discussion, senators also raised concerns about:

• Construction inflation
• Escalating material and labor costs
• Deferred maintenance risks
• Long-term bridge inventory sustainability

PennDOT acknowledged:

• Significant cost pressures due to inflation and supply chain volatility.
• The importance of predictable revenue to avoid more expensive long-term deterioration cycles.

This reinforced that both transit and highways face structural financial challenges.

Long-Term Revenue Sustainability

Multiple senators raised long-range concerns about:

• Declining gas tax purchasing power
• Increased fuel efficiency
• Vehicle electrification trends
• The long-term sustainability of Act 44 and Act 89 funding structures

PennDOT did not propose a specific reform but acknowledged:

• The revenue model will continue to face erosion.
• Broader structural conversations will be necessary.

Importantly, members signaled that any transit funding increases may need to be paired with revenue modernization and accountability reforms.

Tone and Legislative Direction

Across both parts of the hearing, senators demonstrated:

• Sustained scrutiny of trust fund balances
• Concern about project delivery capacity
• Skepticism that funding increases alone will solve transit challenges
• Interest in structural reform discussions

No votes were taken. However, the record suggests that:

• Transit accountability and performance metrics may receive greater attention.
• PTTF statutory structure could be revisited.
• Transportation funding reform conversations are likely to expand beyond transit alone.

Key Numbers Referenced During the Hearing

• PennDOT total budget: ~$11.4 billion
• Motor License Fund: ~$2.8 billion
• PTTF balance: ~$2.3–$2.4 billion
• Reported SEPTA backlog: ~$5.1 billion
• Member-cited SEPTA unspent capital: ~$850–$859 million (not confirmed on record)
• PRT statutory allocation reference: ~$250 million annually

Overall Conclusion

The Senate Transportation Budget Hearing was not merely a funding discussion—it was a structural debate.

Lawmakers are increasingly focused on:

• The difference between fund balances and real-world service capacity
• Whether capital structures align with operational realities
• The delivery capacity of major transit agencies
• The long-term sustainability of Pennsylvania’s transportation revenue model