Pennsylvania May Get Oil Company Tax Under Rendell Road-Repair Proposals

Bloomberg

Pennsylvania Governor Ed Rendell proposed taxing oil companies and increasing motor-vehicle fees to generate an additional $1 billion annually for transportation infrastructure.

Oil companies do about $5 billion in business each year in the state while paying some $35 million in taxes, less than their fair share, Rendell, a 66-year-old Democrat, said today. A Republican spokesman said Rendell’s proposed tax is unlikely to pass, and might be unconstitutional.

Profits of oil companies doing business in the state would be taxed 8 percent under the proposal, bringing in about $576 million during the first full fiscal year. Motor vehicle fees, some of which haven’t been increased in decades, would be adjusted to reflect the rate of inflation, Rendell said in a press conference in Harrisburg, the capital.

Transportation funding is “one of the most important and immediate challenges facing the commonwealth,” said Rendell, who is serving his final year in office. “We all know that we’ve averted tragedy by happenstance here in Pennsylvania. We can’t endanger public safety any longer. We cannot wait another month before we get to work on these projects.”

Pennsylvania has 5,646 state-owned structurally deficient bridges, the most of any U.S. state, and more than 10,000 miles of roads in need of repair, according to a statement announcing the plan.

Scaling back

On Aug. 12, the Pennsylvania Transportation Commission, which sets transportation priorities for the state with the fifth-largest road network, cut its planned expenditure for the next 12 years from $67.9 billion to $51.6 billion, citing questions about federal funding, inflation and the lack of additional resources.

The state spent $3.9 billion on highways, bridges and transit in 2009, aided in part by $1 billion in federal stimulus funds, said Erin Waters, a spokeswoman for the Pennsylvania Department of Transportation. The state needs an additional $3.5 billion in annual funding to maintain infrastructure, according to a May report by the Transportation Advisory Committee, which was established in 1970 to help determine the state’s needs.

Oil companies operating in Pennsylvania avoid most corporate income tax because their accounting credits profit to parent firms based in other states, Rendell said.

Under the proposal, the companies would be exempt from the 9.99 percent corporate net income tax. They would be barred by law from passing the new tax on to consumers at the pump, he said. The proposal would allocate money to the Attorney General’s office and the Department of Revenue to enforce the tax though audits.

33 Cents

Motor-vehicle fee increases would cost the typical Pennsylvania driver approximately 33 cents a week, Rendell said. That would add almost $434,000 to the motor license fund, according to calculations by the governor’s office sent in an e- mail from a spokesman, Gary Tuma.

The proposal may create as many as 40,000 “good-paying” jobs in the sixth-most-populous U.S. state, Rendell said. The General Assembly may vote on the measure in coming months.

A spokesman for Senate Majority Leader Dominic Pileggi, a Republican, said such a tax would be unworkable and unpassable.

“The specific plan to tax oil company profits -- and somehow prohibiting the companies from passing that cost on to Pennsylvania consumers -- has serious constitutional issues under the Commerce Clause,” said Erik Arneson, the spokesman. “At best, we would face years of litigation before seeing any possible revenue from that scheme.”

He said that the plan would likely die in the Senate.

House Republicans favor exploring public-private partnerships and greater contributions from local governments and users before turning to taxes and increased fees, said Steve Miskin, spokesman for the House Republican Caucus.

Rising Enrollment Strains, Crowds Western PA Colleges

Pittsburgh Tribune-Review

During her time at the University of Pittsburgh, Sandy Bly has seen the impact of ballooning freshman enrollment.

Students living in converted lounge areas. Difficulty in registering for required courses.

"It's pretty frustrating," said Bly, 20, a senior majoring in accounting and general management.

Colleges and universities in Western Pennsylvania and across the nation are coping with similar growing pains. Enrollment is rising because of a lack of jobs, employers' demands for a bachelor's degree and more older students returning to the classroom.

At Pitt, where the number of new students increased 12 percent between 2005 and 2009, students initially assigned to lounges were in regular rooms within months, said Bly, a resident assistant. Still, the problem is repeating this fall.

About 50 freshmen will start the school year at the Wyndham Hotel Pittsburgh-University Place in Oakland, Pitt Provost Patricia E. Beeson said. Officials couldn't say how long those students might be there.

At Robert Morris University in Moon, about 200 students will live at the Holiday Inn Pittsburgh Airport this year because of a housing shortage that coincides with a record freshman class of more than 900, said Jonathan Potts, a university spokesman.

Beeson said she and her counterparts at schools across the country had a tough time anticipating the sizes of last year's and this year's first-year classes.

At Pitt and RMU, more students accepted admissions offers this year — boosting freshman class sizes, officials said.

"The economic uncertainty has made it difficult to know how many students to accept," she said.

A 2009 report by the National Center for Education Statistics projected that America's undergraduate enrollment will increase by 12 percent between 2007 and 2018. That would bring the total to 17.5 million students, up from 15.6 million.

Enrollment among 18- to 24-year-olds is projected to grow by 9 percent during that period, to 12.1 million, while the number of 25- to 34-year-old students could mushroom by 25 percent, to 5 million.

"Today, you need a bachelor's degree or you're not going to do well in the short-term, the next three to five years," said John Hammang, a spokesman for the Washington-based American Association of State Colleges and Universities.

Mark Kantrowitz, a financial aid expert based in Cranberry, published a report last week that shows recessions typically spur college enrollment in pursuit of such programs as education degrees. The average annual increase during a recession is about four times what it is otherwise, he concluded.

Critics argue that higher-education officials haven't handled the demand appropriately this time around.

"In almost any other endeavor with a product or service, they're able to achieve economies of scale," said James A. Boyle, president of College Parents of America, a Virginia nonprofit. "Why can't they try to serve more students with a fixed level of investment, like more classes online?"

Pitt officials have no plans to add online courses targeted to traditional undergraduates, said Kit Ayars, a senior assistant to Beeson.

RMU officials plan to start eight online-degree programs, including business degrees, this fall, Potts said, but those are aimed at working adults.

Pitt is adding class sections of key freshman courses such as anthropology and composition. RMU hired eight faculty members to accommodate its bigger freshman class and programs, in addition to adding 34 class sections for the freshmen, Potts said.

Earlier this month, Pitt announced a $17.6 million project to build 48 on-campus apartments for 155 students before the start of the 2011-12 academic year.

Pitt officials generally can guarantee only three years of on-campus living for undergraduates, said Linda K. Schmitmeyer, a school spokeswoman.

A $12 million apartment-style residence hall for 190 students at RMU is expected to open in fall 2011, Potts said.

Duquesne University is building a residence hall for the first time in about a decade, said Paul-James Cukanna, associate provost for enrollment management. Scheduled to be finished in spring 2012, the $38 million building will house 400 upperclassmen in suites.

"Our freshman class size has gone up for the past number of years," Cukanna said. "The increase has been by design — not by happenstance."

When Duquesne President Charles J. Dougherty arrived in 2001, a total of 1,191 new students entered the school. Last year, that number was 1,432, Cukanna said.

Competition in the higher-ed marketplace has compelled Duquesne officials to offer new programs, such as a pharmacy degree that students may earn on weekends, he said.

PA Company has Tombstones Going Digital

Philadelphia Inquirer

 

WAYNESBURG, Pa. - The concept of barcodes on tombstones and interactivity at the cemetery was considered too far-fetched when Glenn Toothman first traveled to funeral industry conferences 10 years ago.

"Nothing in the death-care business happens too quickly," he said.

After years of waiting, technological developments have finally allowed Toothman to get to a point of "rebirth" for his Waynesburg company, the Memory Medallion.

The Memory Medallion story began one Sunday evening in 1999, when Toothman, then the district attorney for Greene County, was visited by his father, a retired judge.

"I spent the day in the cemeteries," the judge told his son. "And I hate to think that life comes down to this dash" between the birth and death dates on a tombstone.

You're the problem-solver of this family, he told his son, and you need to think of a better way to honor the deceased.

Toothman has always been a "frustrated electronic engineer," and he knew the answer had a technological solution , replace the dash with a high-tech dot that can direct cell phones to websites and video about the deceased.

A standard Memory Medallion remembrance package costs $225 and includes a barcode medallion for the grave site, a website of eight photos and 1,000-word story and a printed biography. Family members also can record a video about the deceased that plays on smart phones that scan the barcode, called a QR code.

QR codes have become hot tools for advertisers hoping to hook young shoppers with promotional deals. Japanese companies started the trend of putting them on tombstones.

Toothman said his board of directors doesn't like him to tell this next part, but what's true is true: The solution came to him in a dream.

Surveying Green Mount Cemetery on a recent morning, Toothman recounted the dream with tears in his eyes. He saw himself walking through a cemetery holding a device that touched the tombstones and displayed photos of his family.

He had his first prototype after about 30 days of tinkering in the basement. His wife would find her moonlighting husband asleep in the suit he'd worn in court that day.

In 2001, the company applied for funding from Innovation Works, a nonprofit venture capital firm that provides funding for startups.

He secured a $300,000 grant.

The smart phone market has been a godsend for Memory Medallion, which previously required users to lug a laptop to the tombstone and download the information through a USB cable.

The accompanying remembrance website links to online genealogy sources and also can have customized links, such as a personal Facebook page. A fourth link was introduced recently and is available for corporate sponsorship.

A certified genealogist on staff, Candice Buchanan, sets the page up for families.

The company is in talks with public memorials that honor those fallen on Sept. 11, 2001, and Memory Medallions has been used as a supplement to historical tours that stop in a cemetery.

The first year Memory Medallion saw about 50 sales. Last year the company recorded about 5,000, and Toothman expects business to grow about 200 percent in the coming years. His staff of seven workers also will grow in scale, he said.

Toothman, who resigned as Greene County's district attorney in 2001 to focus on the Memory Medallion, expects 2011 to be the first year he'll make more money in the new job than he did in his old one.

The company works out of a vine-covered, Victorian home, complete with a turret and second-story wraparound porch.

Clients come from near and far.

Marilyn Kerr, of Waynesburg, has more than six Memory Medallions for her immediate family, but her first Medallion was for a distant cousin with no children or relatives.

"There would be no one to hear her story without it," she said. "It's something that lives on and on and on. When I'm not here to tell my children about them, I want them to feel more closely related to that individual," she said.

Toothman talks about the project in evangelical, not fiscal, terms, viewing it as a chance to help his depressed community economically and his fellow man spiritually.

And industry executives say the skepticism has faded over the years.

Dave Bishop offers Memory Medallions to clients as senior executive vice president of sales at McCleskey Mausoleums of Atlanta, and the rate of purchase is about the same for clients who are planning their own grave site or buying one for a deceased relative.

Bishop said his company does not get a cut of Medallion profits , he simply sells it because he believes in it.

"Cemeteries are the receptors of heritage," he said. "It's really neat, but we have to make sure it is going to last."

But the company long ago satisfied its most important customer.

Before his father died in 2001, Toothman showed him the first Memory Medallion.

"He said it finally gave him a reason to own a computer," he said.

Pittsburgh Commercial Real Estate Market Improving

Pittsburgh Business Times

Real estate research company RealSTATs says the Pittsburgh region's commercial real estate market showed an increase in sales volume for the first half of 2010, compared to the same period last year.

RealSTATs data shows the volume of commercial sales in the Pittsburgh region during the first half was $395.98 million, up 54 percent from the first half of 2009, when the volume was at a five-year low of $256.9 million.

The average commercial sales volume for the first half of the year in the region over the past five years is $667.3 million.

In Allegheny County, commercial sales volume was up 34 percent over the first half of 2009, to $277.5 million. Within the city of Pittsburgh, two sales accounted for almost half of the first half's $160.3 million total: the $38.6 million sale of the Federal North building at 1315 Federal St., and an eight-story office building on Penn Avenue, which sold for $35 million.

Collingswood PATCO Construction Project Nears an End

Philadelphia Inquirer

Two years of pokey trains, parking disruptions, and noisy nights around the Collingswood PATCO station are almost over.

Just when a columnist - puzzled by the seemingly inscrutable and endless goings-on - got curious enough to ask a couple of questions.

Turns out a $12 million project to replace 5,000 concrete pads under the tracks along a half-mile elevated stretch of the commuter line should be finished this month, PATCO general manager Bob Box says.

Although this sort of infrastructure project is a major undertaking, there's little glamour attached. The need isn't evident to the public, but the annoying nature of the work is all too clear. And there's little visible difference after the project is done.

Hardly the stuff of photo ops and ribbon-cuttings.

But the wear and tear caused by the trains and the weather made continued spot replacement of the pads on the 42-year-old viaduct impractical. So in October 2008, crews began jackhammering out, and pouring a replacement for, each of the pads, which sit atop the concrete deck and keep the tracks at proper grade.

The rails were then bolted into the new pads.

"It's very precise work," Box says.

Noisy, too: "Pennsylvania concrete contractors are working at night removing concrete. It's an inconvenience for people who live around the viaduct, and it impacts the [train] schedule."

PATCO, which carries about 36,600 passengers on a typical weekday, maintained service during the project.

Work was done during off-peak hours and involved closing sections of track and slowing trains to 15 m.p.h.

While the 219 trains that hurtle along the viaduct on weekdays (156 on Saturdays and 124 on Sundays) should run a bit smoother and quieter after the repair, passengers may not notice. But the job was essential.

"You could call it a midlife rehab," Box says.

Whatever you call it, the imminent completion is good news.

"We'll be happy to see it end," observes Collingswood Mayor Jim Maley, who says PATCO was generally cooperative in resolving noise and other complaints.

"In the evening you could hear them out on the tracks with heavy tools. It was definitely noticeable," says Michael Miles, a lawyer who lives in the LumberYard condominium complex adjacent to the viaduct and uses PATCO to get to work.

"We got through it!" says Betsy Cook, director of the Collingswood Farmers' Market, a Saturday morning attraction under the Speed Line between Irvin and Collings Avenues.

Two dozen vendors and thousands of patrons had no choice but to go along for the ride. And the market's musicians found themselves competing with not only the rattle and roar of trains but also the buzz of generators, the hiss of hoses, and the rat-a-tat of jackhammers.

"Some of the seniors complained," says Cook, whose house backs up to the viaduct. "There were bright lights and loud noises in the middle of the night. It was annoying."

"But I grew up in Collingswood," she adds. "The Speed Line is my neighborhood train. It really does make a contribution to the town. So whatever they had to do to fix it up is all right with me."

In the enveloping heat of the station platform Wednesday, riders Chad Jackson of Philadelphia and Rose Del Vecchio of Collingswood had no complaints about the project. Or PATCO, either.

"I've been taking the train for a while, and I hadn't even noticed, really," said Jackson, a 27-year-old mechanical engineer.

"I take this train to work every day," said Del Vecchio, an Atlantic City casino worker. "I love it."

Gotta love this, too: PATCO has no major projects planned for the Collingswood station area for the next several years.

Taxpayers Fund Building Amid the Slump

Philadelphia Inquirer

Much of the scant construction in Pennsylvania in the near future will be funded by taxpayers, including the projects crammed into the $1.6 billion "Public Improvement Projects, Transportation Assistance Projects and Redevelopment Assistance Capital Projects" signed by Gov. Rendell last week.

My colleague Suzette Parmley has written about the $10 million offered developer Robert Ambrosi for his conversion of the former Pincus Bros. clothing factory in Old City into a hotel, apartments, and stores.

Our Harrisburg staff detailed the state's plans to immortalize the political papers of lame-duck Sen. Arlen Specter and the late Pentagon contract specialist Rep. John Murtha.

There are a lot more like those packed into House Bill 2289.  

City projects include:

$20 million for the proposed American Revolution Center in Center City, plus $5 million for the Independence Visitor Center.

$15 million for "redevelopment" at the former Tasty Baking Co. at Fox and Roberts Streets bordering Nicetown and East Falls.

$10 million for projects, including the Specter library, at Philadelphia University in East Falls.

$10 million for a "research/education facility" at Drexel University.

$5 million for "mixed-use development" in South Philly's Grays Ferry section.

$5 million for Norris Square Civic Association's redevelopment project in North Philly.

$5 million for Aspira Inc., which has a long track record recruiting and supporting Latino students for college, to "develop" the former Cardinal Dougherty High School in Olney.

$3 million "for a new Community Legal Services building" to house antipoverty lawyers.

$750,000 for "campus expansion" at Philadelphia College of Osteopathic Medicine on City Avenue.

And in the suburbs:

$15 million for concrete construction at the Keystone Industrial Port Complex in Falls Township.

$10 million for "blight removal" and reconstruction at Chester's Union Square Neighborhood Revitalization District.

$7.5 million "for a mixed-use commercial/retail development" at Fornance, Wood, and Locust Streets in Norristown.

$5 million for "construction, renovation, and improvements in the Bucks County remodeling enterprise zone" in Bristol Township.

$5 million for "the retail development of a 35-acre site in Upper Darby."

$1.5 million for "an industrial facility project" at an unnamed site in Montgomery County.

Where'd we get the money for Pennsylvania concrete contractors and construction? We're borrowing it, from the regular sale of state bonds to private investors, Rendell spokesman Gary Tuma told me. Taxpayers will be financing these projects for decades, as they do with most of what governments build.

A lot of the projects require additional funds from private developers, Tuma said. Plus, the state Office of the Budget can impose conditions before releasing the money.

So maybe not all the projects will get built - this year, or ever. Some of the money will end up going to projects in next year's bill.

There is no all-wise Harrisburg agency picking economic winners. No "invisible hand" of the free market killing off the worst proposals.

This is a grassroots political process, if by grassroots you mean politically adept developers and private and community interests pushing legislators to let them get their hands into the public wallet.

Grabbing Pennsylvania public funds for your firm and your buddies, in the name of higher social goals, goes back to Ben Franklin and Robert Morris, as Charles Rappleye's new Morris biography reminds us.

From the public's perspective in these job-scarce times, the process is only tolerable if a lot of people are hired to build these projects, and run them, once they're done.

America's Warehouse

Besides tax-funded projects, almost the only action in Pennsylvania commercial real estate these days is out in the warehouse districts clustered along I-78 from Allentown down to Chambersburg, where the grandchildren of miners and steelworkers seek work pushing pallets and packing truck containers.

Pennsylvania's toll-free Interstate belt, along the inland truck route from New York to Washington, now ranks as America's Warehouse, the postindustrial home of places where stuff made somewhere else gets parked until East Coast consumers and businesses want it.

Check, for instance, the latest "industrial space" report from Philadelphia-based national landlord Liberty Property Trust.

So far this year, Liberty has leased three million square feet of warehouse space - that's as much as all the office space in Philadelphia's two Liberty Place towers, plus the Liberty-built Comcast Center - in the state's warehouse belt.

New tenants include companies such as Diversified Distribution Systems Inc. , of Minneapolis , which is moving from a smaller Baltimore facility into a nearly half-million-square-foot facility near Chambersburg in search of extra space and a "more advantageous labor market," as president Gary Langer told me.

We're now America's Warehouse? "You pretty much nailed it," says Liberty spokeswoman Jeanne A. Leonard.

Phoenixville Hospital to build its Third Cardio-Cath Lab

Philadelphia Business Journal

Phoenixville Hospital is getting ready to build a third cardiac-catheterization laboratory to keep pace with patient demand at its burgeoning heart program.

The Chester County hospital performed 1,192 diagnostic and therapeutic catheterization procedures — such as balloon angioplasties to clear blocked arteries — in 2007, the year its second cath lab opened.

This year the medical center expects that number to reach 2,059 procedures.

“This is an area where we’ve had significant growth,” said Stephen Tullman, president and CEO of the hospital. “We’re at capacity at the two cath labs now.”

The $3 million price tag for a new cath lab is a small portion of an ongoing expansion and renovation project expected to carry a final cost of between $90 million and $100 million when completed over the next two years.

Phoenixville Hospital — which is owned by Community Health Systems of Franklin, Tenn. — last year concluded the bulk of its expansion, spending $80 million on a new patient tower, a medical office building and much-needed parking garage. The tower project enabled the medical center to grow from 138 hospital beds to 160 beds, all now in private rooms. The hospital also increased its count of intensive-care units and telemetry beds, which feature continuous monitoring.

Expanding the hospital’s heart program is a strategy that began in early 2002 and continues today. The hospital performed its first cardiac intervention and first open-heart surgery in 2003. Over the years, other services were added, such as implantable defibrillators and peripheral intervention procedures, robotic-assisted surgery and, last year, electrophysiology.

Phoenixville Hospital has a clinical affiliation in cardiology (along with oncology, pathology and diagnostic imaging) with the University of Pennsylvania Health System.

Tullman cited several factors for the growth of the hospital’s heart program.

He said the hospital has recruited one of the largest groups of acute-care cardiologists in the region. A 12th heart physician, Dr. Karthik K. Linganathan, who specializes in the care of chronic heart failure patients, is joining the team later this month.

Tullman also noted the communities served by the hospital have grown with the housing boom in western Montgomery County and northern Chester County over the past decade. In addition, he said, the region’s population has aged and older residents require more heart care. And they want to get that care close to home.

“Patients want to stay here,” said Dr. Hans M. Haupt, director of cardiothoracic surgery at Phoenixville and the surgeon who performed the first open-heart surgery at the hospital in 2003. “They don’t want to go into the city for surgery.”

Dr. Rajiv Dhawan, the hospital’s cardiac catheterization lab co-director, said that “very few” patients at Phoenixville opt to make the trip to one of the larger Philadelphia hospitals for heart care. “We have all the technology and all the services here,” Dhawan said. “That really counts.”

Haupt said Phoenixville, like other hospitals around the region and the country, is seeing a decline in open-heart surgical procedures as more therapeutic catheterization procedures — such as those involving angioplasties and stents to clear blocked arteries — are handled in cath labs. He said Phoenixville’s surgical volume has not dropped dramatically because of the large volume of elderly patients the hospital serves who are not strong candidates for the cath lab procedures.

Dr. Herbert Fisher, an interventional cardiologist at Phoenixville, said one of the unique features being planned for the third catheterization lab is a “hybrid” operating room that will allow surgeons and interventional cardiologists to work side-by-side.

The hybrid OR will combine the high-tech imaging capabilities of a cath lab with a large operating room to allow a patient to receive an angioplasty, then a bypass procedure, without having to be transferred to a different room.

Fisher said Phoenixville Hospital is also in the planning stages of enhancing preventative primary-care programs in heart care to provide more diagnostic screening of otherwise healthy patients to catch heart ailments earlier.

“We do all these fancy procedures on patients who represent just a small section of the population we serve,” Fisher said. “We want to do more to keep patients out of the [operating room]. We do colonoscopies and mammograms now, we should be doing more Indianapolis heart examinations on patients at midlife.”