House hearing spotlights debate over governor’s transit carve‑out and who benefits under statutory formula

Pennsylvania Transportation Secretary Mike Carroll told the House Appropriations Committee on Feb. 20 that the governor’s proposed sales‑tax carve‑out for transit would raise new money but that distribution of those dollars is set by a statutory formula that PennDOT must follow.

The governor proposes an additional 1.75 percentage points on the sales tax to generate roughly $290 million for transit, Carroll said, and the administration’s overall transit package would add to an estimated state transit grant pool of about $1 billion for fiscal 2025–26. Under the current statute, a substantial share of any additional transit dollars would be allocated to SEPTA in southeastern Pennsylvania, and Carroll said roughly half of a proposed $300 million support package would flow to SEPTA as the statute prescribes.

Why it matters: Several lawmakers urged reexamination of the formula, saying population changes since it was enacted make the distribution feel inequitable to suburban and rural counties. Supporters of the governor’s plan and transit officials say urban transit systems carry large regional and statewide economic activity and that disruptions to SEPTA would ripple across the commonwealth.

Carroll said PennDOT cannot reassign statutory dollars and that any change to how transit aid is split would require legislative action. “PennDOT will comply with the law, and we will deliver the funds as are legislatively, statutorily prescribed,” he said. He also noted that transit in counties outside the SEPTA footprint would also receive additional money under the governor’s proposal because the overall pool grows.

Lawmakers pressed for more detail on how additional funds would be applied and for data on how smaller transit agencies statewide would be affected. Representative Kale and others said their constituents see frequent rhetoric that “all the money goes to SEPTA,” and asked whether smaller agencies receive proportionate benefit. Carroll and PennDOT deputies said the department would provide detailed grant and obligation figures and flagged that the statutory formula dates to Act 44 (2007) and other earlier policy choices.

Carroll and several committee members also emphasized that federal infrastructure funding (the Bipartisan Infrastructure Law and other federal awards) has materially increased resources available for roads and transit, and that federal awards operate on different timelines and rules than state statutory distributions.

The hearing produced repeated invitations from members for PennDOT to meet with delegations that want to explore formula changes. Carroll said he would meet with members and review proposals but noted that rewriting a distribution formula typically produces winners and losers and requires careful legislative work.

Ending: Committee members from urban, suburban and rural districts said they will pursue follow‑up briefings and requested PennDOT provide agency‑level grant budgets and the data backing statutory distributions so members can evaluate potential changes to the formula.