3.9.26 - House Transportation Budget Hearing Overview

Pennsylvania House Budget Hearing

Department of Transportation (PennDOT) – Detailed Overview / Notes

I. Opening and Hearing Context

A. Budget framing

• Chairman Struzzi framed the PennDOT hearing around the Governor’s proposed transportation spending plan.
• He noted that while PennDOT’s General Fund request is relatively small, the agency’s total proposed spending is about $11.4 billion, which is roughly $513 million, or 4.3%, lower than the current fiscal year.
• He emphasized that PennDOT’s funding comes from a mix of:
  • federal grants,
  • the Motor License Fund,
  • restricted accounts,
  • the lottery,
  • and the Public Transportation Trust Fund.
• He also flagged transit funding as a major issue for the upcoming fiscal year, particularly the continuing debate over shifting away from the prior transportation funding mechanism and toward other revenue streams.

II. DBE Recertification and Disadvantaged Business Enterprise Program

A. Trigger for the reevaluation process

• Representative Salisbury opened with questions about the reprocessing of minority- and women-owned business certifications under the Disadvantaged Business Enterprise (DBE) program.
• PennDOT explained that the trigger was a USDOT interim final rule issued in early October, which took effect immediately and gave states no advance notice. PennDOT testified that it did not receive further guidance from USDOT for roughly 30 days after the rule was issued.

B. PennDOT’s role and program pause

• PennDOT officials explained that the department administers most relevant procurements through the federal DBE framework, which is why the reevaluation process is being handled through PennDOT.
• The rule effectively forced a pause while the department evaluated how to comply and how to reevaluate existing certified firms.

C. Standards being applied

• Legislators asked whether PennDOT itself was setting the standards for disadvantage because the presumption tied to race or gender had been removed.
• PennDOT responded that applicants now must submit a personal narrative statement demonstrating disadvantaged status, and that the department is not allowed to consider race or gender when reviewing the applications. PennDOT said the underlying process for evaluating social and economic disadvantage had not otherwise changed.

D. Scope of the affected firms

• PennDOT testified that:
  • there are about 3,000 firms on Pennsylvania’s DBE list,
  • of which about 1,400 are Pennsylvania firms.

E. Status of reevaluations

• PennDOT said it is focusing on Pennsylvania firms first, before addressing out-of-state firms.
• On progress to date:
  • about 7% of the 1,400 Pennsylvania firms had been reevaluated,
  • roughly 100 firms had been reevaluated,
  • 88 firms withdrew from the process, but may reapply later,
  • about 500 firms were still outstanding and had not responded,
  • PennDOT said it is engaging those firms weekly.

F. No new applicants during reevaluation

• PennDOT stated that new applications are paused until the reevaluation of previously certified firms is completed.
• Once that process is finished, new firms will be allowed to apply and will be judged on the merits under the interim rule.

G. Practical procurement implications

• Members pressed PennDOT on the business implications for firms that withdrew or remain uncertified.
• PennDOT responded that even where DBE certification is unresolved, some firms may still have other work certifications that allow them to continue competing for department procurements, and the department is trying to keep those firms engaged where possible.

III. Real ID Implementation and Access Challenges

A. Basic implementation status

• Members questioned PennDOT about the implementation of Real ID, especially following the May 7, 2025 federal deadline for domestic air travel and access to certain federal facilities.
• PennDOT testified that about 36% of licensed Pennsylvanians with photo ID currently hold a Real ID.

B. Problems at airports or federal facilities

• Secretary Carroll said he was not aware of widespread issues involving Pennsylvanians being unable to board commercial flights or access federal facilities due to lack of Real ID. He said he had not heard such concerns from airport directors across the state.

C. Pennsylvania’s optional approach

• PennDOT emphasized that Pennsylvania made a policy choice to make Real ID optional, unlike some states where it is mandatory.
• Secretary Carroll noted that some residents without Real ID still may have a passport, which is also acceptable for air travel.

D. Outreach and promotion

• PennDOT said it has undertaken an aggressive outreach effort, including:
  • advertising campaigns,
  • promotional work,
  • and direct visits by the Secretary to every commercial airport in the state with partners such as AAA.

E. Barriers for women and people with documentation complexity

• Legislators raised repeated constituent complaints that Real ID is particularly difficult for women who have had name changes due to marriage or divorce.
• Secretary Carroll acknowledged that Real ID is often more difficult for women than for men because of documentation chains tied to name changes.
• He said PennDOT tries to be accommodating and that Real ID centers are staffed with highly trained personnel, while also conceding that the department does not deliver perfection in every case.

F. Real ID center model

• Members asked whether access to same-day Real ID centers would be expanded.
• PennDOT responded that the current system—some centers issuing same-day Real IDs and others processing applications with IDs mailed later—exists because the department cannot station highly specialized Real ID staff at every licensing center, especially in more rural areas.

G. Security and compliance

• PennDOT said it is confident that Pennsylvania’s Real ID program meets all federal security requirements and that there have not been any significant “hiccups” on compliance.

IV. Aviation Funding and Airport Program Issues

A. State aviation funding levels

• Members asked about support for airports outside major hubs such as Philadelphia and Pittsburgh.
• PennDOT testified that it has about $25 million annually available to support 119 public-use airports across Pennsylvania.

B. Capital planning and federal role

• PennDOT said it works with airports each year on a four-year capital improvement plan.
• The department also acts as a block grant state, administering federal funds for 40 airports participating in the federal program.

C. Additional aviation funding in the budget

• PennDOT noted that the Governor’s budget includes an additional $1.6 million to leverage available federal aviation funding.

D. Funding shortfalls

• PennDOT emphasized that aviation capital needs—such as aprons, hangars, and other improvements—far exceed the dollars currently available.

E. Philadelphia airport and America 250 / World Cup-type travel pressures

• Members asked specifically about Philadelphia Airport’s ability to handle major inbound travel associated with major events.
• PennDOT said it did not have dedicated additional funding ready for Philadelphia beyond existing programs, but is exploring partnership opportunities, including using PennDOT land to support transportation network company waiting lots and reduce congestion.

F. Regional economic development and airport demand

• Later testimony connected major development projects such as the Eli Lilly investment in the Lehigh Valley to likely future air-traffic and multimodal demand at regional airports like Lehigh Valley International and Wilkes-Barre/Scranton.

V. Shared Ride Program and Transit Funding

A. Scope and importance of shared ride

• PennDOT stressed that Pennsylvania has transit in every county, and in many rural counties that means shared ride service.
• PennDOT reported that approximately 4.9 million shared rides were delivered in FY 2024–25.
• The service is used statewide in all 67 counties.

B. Funding strain and senior affordability

• PennDOT said that to keep fares affordable for seniors, the state contribution to the shared ride program needs to increase.
• Officials explained that the sponsor share—commonly referenced as 15%—becomes harder to maintain as overall trip fares rise, which can result in higher out-of-pocket costs for seniors.

C. Shared ride study

• PennDOT said it is planning to complete phase two of a study of the shared ride program to determine whether a better funding model exists than the current per-trip reimbursement structure.

D. Persons with disabilities

• In a separate exchange, PennDOT said part of the transit funding in prior and proposed budgets is directed toward both the shared ride program and services for persons with disabilities.

E. Cross-county and off-hours service limitations

• Members raised concerns about crossing county lines and offering more service on evenings, weekends, and holidays so riders can access work and healthcare.
• PennDOT acknowledged these long-standing service issues as part of the broader transit funding challenge.

VI. Broader Transit Funding Structure and the Sales Tax Carve-Out Debate

A. Statewide transit need, not just Philadelphia and Pittsburgh

• Members emphasized that public transit exists statewide and questioned the perception that only SEPTA and Pittsburgh Regional Transit benefit from state transit discussions.
• PennDOT responded that the proposed 1.75% sales and use tax carve-out would have generated roughly $320 million annually and would have been shared by all transit agencies statewide, not just SEPTA and PRT.

B. Coverage across agencies

• PennDOT testified that both the prior proposal and any future proposal of that kind would support all 52 transit agencies in the Commonwealth.

C. Shared ride agencies

• PennDOT clarified that shared ride agencies do not receive formula-driven operating funds the same way some fixed-route systems do, but they do receive support through programs of statewide significance.

VII. Capital-to-Operating Transit Flex / Waiver for SEPTA, PRT, and Others

A. Waiver structure

• Legislators asked about the Governor’s directive allowing capital dollars to be shifted to operating assistance for major transit systems.
• PennDOT distinguished between the public shorthand “flex” and what it described as the actual waiver process.

B. SEPTA and PRT

• PennDOT testified that:
  • SEPTA requested $394 million in capital-to-operating waiver authority, but is expected to use about $100 million;
  • PRT requested about $106 million and is expected to use about $90 million.

C. Other transit systems

• PennDOT explained that some agencies, such as rabbittransit/ATA-type regional systems, do not have the same dedicated capital allocations and therefore could not use the exact same waiver structure.
• PennDOT said it instead secured about $6.5 million annually for one such agency over the next period to support service.

D. One-time authority only

• PennDOT stated that the governing statute and regulation make this a one-time opportunity, and that it cannot simply be repeated in future years.

E. Effect on capital backlogs

• PennDOT said the waiver will create a ripple effect into the future because it pushes capital work out into later fiscal years.
• SEPTA and PRT were required to submit lists of deferred projects, though none of those deferred projects were allowed to be safety-related.

VIII. IIJA Funding and Highway / Bridge Capital Program

A. IIJA impact

• The hearing included broader discussion of how the Infrastructure Investment and Jobs Act (IIJA) has expanded PennDOT’s capital program.
• According to the summary provided, IIJA has increased PennDOT’s annual highway and bridge lettings from roughly $2.25 billion pre-IIJA to about $3 billion, with the potential for even higher totals in years with major projects.

B. Matching and drawdown

• PennDOT stressed that Pennsylvania is fully matching and drawing down the available federal infrastructure funds.

C. Multiyear funding and project commitments

• PennDOT explained that large transportation projects are funded and obligated over multiple years, meaning funds may be committed long before they are fully spent.
• This was used to explain how large bridge and corridor projects can build up over time.

IX. Evolving Transportation Revenue Sources and EV / Plug-In Fees

A. Structural revenue shift

• PennDOT testified that the Motor License Fund historically relied on about 75% motor fuel taxes and 25% driver/vehicle fees, but that has shifted to roughly 70% fuel taxes and 30% fees because of:
  • improved fuel economy,
  • more hybrids,
  • and more electric vehicles.

B. EV and plug-in hybrid road user charge

• Members asked about the new EV and plug-in hybrid fee enacted in 2024.
• PennDOT said there are about 160,000 electric and plug-in hybrid vehicles in the Pennsylvania vehicle population.
• Since implementation in April 2025, PennDOT testified that the Commonwealth has collected more than $13 million in road user charges.

C. Not a full replacement for motor fuel taxes

• Secretary Carroll said the EV and hybrid fees are helpful but probably do not provide a full backfill compared with what an average driver would otherwise pay through fuel taxes, which he estimated at about $325 per year for an average vehicle and average miles driven.

X. Local Roads, Bridges, Turnback / Take-Back Programs, and Maintenance Burdens

A. Local maintenance concerns

• Members raised the issue of municipal “turn back” or “take back” programs, arguing that local governments can sometimes maintain certain roads at lower cost.
• PennDOT said it was open to a discussion about additional funding for the turnback program and acknowledged that it could be a worthy conversation and potentially save money.

B. Scope of PennDOT system

• Secretary Carroll emphasized the immense size of PennDOT’s responsibilities:
  • about 44,000 miles of state roads, including even very short dead-end roads,
  • and about 25,000 bridges, many more than 50 years old, especially on the interstate system.

C. Resource gap

• PennDOT testified that unmet needs for the road and bridge network would be in the billions of dollars and that the department’s task is constantly to reconcile those needs against the constitutionally protected but limited Motor License Fund resources.

D. State Police fund decoupling effect

• The department also noted that an additional $250 million was preserved in the Motor License Fund when prior State Police funding was decoupled from it during the Governor’s first year.

XI. Route 611 and Other Project-Specific / Corridor Concerns

A. Route 611 in the Delaware Water Gap

• A legislator asked for an update on the still-limited reopening of Route 611 through the Delaware Water Gap.
• Secretary Carroll said the key decision-maker is really the National Park Service, though PennDOT district staff worked with federal partners to reopen one lane.
• He said he would revisit the issue with the Park Service, but emphasized that the ultimate decision is more federal than state.

B. Utility road closures and communication with municipalities

• Another member asked whether PennDOT has a policy requiring communication with municipalities and legislators when utility work closes roads.
• PennDOT responded that every district has a municipal services representative, and said it would ensure those representatives are aggressive in communication, while noting that emergency utility events often provide little time for advance coordination.

C. Other local infrastructure issues

• The hearing also touched on corridor-specific concerns mentioned in your summary, including:
  • the I-83 South Bridge,
  • Wildwood Road,
  • Beener Hollow Road,
  • Reading rail and Lehigh/Schuylkill corridor needs,
  • and other regional freight and passenger transportation issues.

XII. CDL, Hazmat, and Administrative / Licensing Concerns

A. Hazmat certification delay

• A member raised a constituent issue involving a hazmat certification problem dating back to summer 2024.
• Secretary Carroll said PennDOT’s legislative team had already begun trying to close the loop and committed to resolving the issue in writing by the end of the month.

B. Allegheny County paperwork issue affecting drivers

• Another legislator asked about a clerical error in Allegheny County that affected drivers because paperwork had not been properly filed with PennDOT going back to 2013.
• Secretary Carroll said the total number of affected drivers is hard to determine, but that it is in the thousands and thousands.
• He described it as a breakdown in county communication and filings, and said PennDOT lacked flexibility under the Vehicle Code in how to treat those convictions.

C. Ignition interlock issues

• The hearing also included questions about the number and oversight of third-party ignition interlock providers.
• Secretary Carroll responded that ignition interlock law is confusing even for attorneys, and said his preference is a change to the law rather than just administrative adjustment.
• He referenced House and Senate legislation being pursued to improve both installation and removal of ignition interlock devices.

D. Inspection stickers and garage owners

• A legislator raised concerns from garage owners that PennDOT no longer allows in-person purchase of inspection stickers as it did before COVID.
• Secretary Carroll said he was hearing the financial impact concerns for the first time but agreed to review whether PennDOT could return to a more accommodating system, noting that the over-the-counter practice had indeed existed before COVID.

XIII. Road Salt, Winter Operations, and Environmental Management

A. Road salt best practices

• One legislator discussed a bill to increase funding for training municipalities on road salt best management practices.
• Secretary Carroll said PennDOT uses a combination of:
  • anti-skid,
  • road salt,
  • and liquid brine pre-treatment,
    depending on the nature of the storm.

B. Environmental concern acknowledged

• PennDOT acknowledged the environmental challenges posed by salt runoff into nearby streams, but said it must balance those concerns against the need to keep roads safe and passable.

C. Broader maintenance role

• Secretary Carroll used the exchange to stress that PennDOT’s work extends far beyond paving roads and includes:
  • litter removal,
  • graffiti,
  • drainage and swales,
  • bridge upkeep,
  • and general system maintenance.

D. Dirt and gravel roads

• Members also noted that prior transportation bills, including Act 89, included a dirt and gravel road component relevant to environmental protection and local road maintenance.

XIV. Overall Themes and Takeaways

A. Multi-modal focus

• The hearing repeatedly emphasized that PennDOT is not only a roads-and-bridges agency but a multi-modal transportation agency, responsible for:
  • highways,
  • bridges,
  • aviation,
  • transit,
  • shared ride,
  • and other modal needs.

B. Funding mismatch

• A recurring theme was that transportation needs—particularly for roads, bridges, transit, and aviation—far exceed available resources.

C. Transit as a major unresolved issue

• Legislators and PennDOT both underscored that a one-time capital-to-operating waiver for major transit agencies is not a permanent solution and that Pennsylvania still needs a stable, statewide transit funding framework.

D. Federal policy and external constraints

• PennDOT repeatedly pointed to federal requirements and outside actors as major drivers of operational constraints, including:
  • USDOT’s DBE interim rule,
  • TSA/Real ID requirements,
  • the National Park Service’s role in Route 611,
  • and IIJA funding structures.