Nov 21 Pennsylvania Governor Tom Corbett,
considered among the most vulnerable U.S. governors seeking
re-election next year, scored a much-needed political win on
Thursday when the state legislature approved a $2.3 billion
transportation package he had championed.
Corbett's voter approval rating is low, especially for an
incumbent, and he struggled earlier this year to get his biggest
policy initiatives, including the transportation bill, past a
state legislature controlled by his own Republican party.
Only one in five Pennsylvania voters think Corbett deserves
to be reelected - and just 37 percent of Republican voters
believe so, according to an Oct. 31 poll from Franklin &
Marshall College. The same poll found that 61 percent believed
the state is "on the wrong track."
Approval of the transportation package is a shot in the arm
for Corbett, according to G. Terry Madonna, director of the
Franklin & Marshall poll.
"This demonstrates executive leadership by this governor,
and that's essential," Madonna said. "This is one of the ways he
can turn the narrative around."
Since taking office in January 2011, Corbett hasn't made
much progress on some of his biggest agenda items.
He wants to privatize the state-owned and operated liquor
system - a move voters support - but the measure has stalled.
Corbett is also trying to privatize the state's lottery, but
the effort has suffered setbacks.
Another key Corbett legislative initiative, to reform the
state's public pension system, has failed to gain traction.
The state's retirement system is unhealthy, even compared
with other U.S. states wrestling with large pension funding gaps
and growing costs.
Its pension system was only 63.9 percent funded in 2012,
well below the 68.4 percent median level for U.S. states,
according to a report by Morningstar on Wednesday.
When asked what passage of the transportation package meant
for Corbett politically, his press secretary Jay Pagni said that
the governor "continues to work strongly and vehemently for the
people of Pennsylvania" and "appreciates the bipartisan efforts
in both chambers."
Pagni said that Corbett would continue pushing for his
policy and legislative initiatives but would not specify which
one he would focus on next. "There is work to be done on all
fronts," Pagni said.
The transportation legislation, which Corbett said he will
sign, will provide funds to replace bridges, rebuild and widen
roads and fix transit systems.
Unlike many other states that use borrowing to finance such
long-term capital projects, Pennsylvania pays for much of its
infrastructure as it goes.
The road and bridge projects will be financed primarily by
the people using them, with higher wholesale gas taxes and
increased fees for vehicle violations, licenses and
registrations. Some changes will start Jan. 1, with others to be
phased in over the next five years, ultimately generating at
least $2.3 billion annually beginning in fiscal 2018.
A unusual coalition of supporters rallied behind the bill to
improve Pennsylvania's transportation systems, including
business, organized labor, and politicians from both sides of
the aisle, analysts said.
The package is "critical for the state's economy... creating
jobs in the short term and improving economic performance down
the road," said Sharon Ward, executive director of the
left-leaning Pennsylvania Budget and Policy Center.
Some lawmakers agreed to support the bill after a prevailing
wage clause was changed so that smaller projects, those under
$100,000, would not have to comply with prevailing wage rules.
Overall, the transportation bill is a "long-term positive
for the state," said Dan Heckman, senior fixed income strategist
at U.S. Bank Wealth Management. "But we're not overly eager
about buying Pennsylvania bonds."
The state's more than $47 billion long-term pension
liability and the financial crisis in Philadelphia's school
district, among other issues, have caused the firm to shy away
from Pennsylvania debt.
"The credit still has the potential to decline over time,"
he said. "We'd rather buy credits we think are on the upswing."