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PennDOT Cuts Budget, Projects in Pandemic Wake

Monday, July 6, 2020

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Weeks after the Pennsylvania economy “reopened” in the midst of the COVID-19 pandemic, leaders with the Pennsylvania Department of Transportation are trying to grapple with how to pay for projects.

At a May state Senate hearing, Acting Secretary Yassmin Gramian said that a revenue loss of $900 million is projected, largely attributed to the pandemic causing Pennsylvanians to drive less.

PA Pandemic Background

On March 17, PennDOT and the Pennsylvania Turnpike Commission ordered all contractors to cease work on current projects for a minimum of two weeks. Pennsylvania was reportedly the first state in the nation to suspend infrastructure-based construction as a result of the COVID-19 pandemic.

However, the Turnpike and PennDOT reportedly continued emergency repair maintenance as needed.

Thomas Northcut / Getty Images

Weeks after the Pennsylvania economy “reopened” in the midst of the COVID-19 pandemic, leaders with the Pennsylvania Department of Transportation are trying to grapple with how to pay for projects.

On March 31, PennDOT reported that 61 emergency and critical highway and bridge projects would be activated statewide, although the normal highway and bridge construction program would remain paused.

A month later, in mid-April, Pennsylvania Gov. Tom Wolf announced a three-phase gradual reopening of the state’s economy.

Through a consolation team involving the state and its Department of Health, the Pennsylvania Emergency Management Agency, the Department of Community and Economic Development, the Department of Labor and Industry and others, the administration developed guidance for businesses, local governments, workers and customers for that process.

What Now

The reduced driving throughout the state shutdown has drastically cut the gasoline tax revenue, which is what PennDOT primarily uses for projects that include maintenance.

Because of this, Gramian said that only 33 of 96 contracts that PennDOT has received bids for (worth $380 million) have funding. The rest are being reevaluated. She also said that the agency will shift maintenance projects from resurfacing to tar-and-chipping wherever possible.

In addition to PennDOT’s gas tax revenue, Turnpike CEO Mark Compton also said that the light traffic has resulted in a projected loss of $500 million in toll revenue, prompting the Turnpike to cut its capital budget for the fiscal year that began in June from $606 million to $459 million.

Gramian said that PennDOT was projected to spend $2.2 billion this year on roads and bridges, but is instead expected to now spend about $1.8 billion.

“Some of those nonessential contracts we put on hold for the time being,” Gramian said. “Many of the ways we did business may be changed forever.”

In addition, officials added that contractors might have to wait longer for payments because of slow cashflow.

PennDOT spokesperson Alexis Campbell did confirm that road and bridges projects that are already underway will continue. PennDOT has since withdrawn advertisements for bids on at least 19 projects.

Officials hesitated to speak on which big projects will be delayed as they hope to get money from a national infrastructure program, which could come with its own strings attached.


Tagged categories: Bridges; Bridges; COVID-19; Funding; Government; Government contracts; Infrastructure; Maintenance + Renovation; NA; North America; Roads/Highways

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