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House Finance Committee Oks RACP Bill

The House Finance Committee this week reported out a bill that would lower the debt ceiling of the Redevelopment Assistance Capital Project (RACP), which provides state matching funds for economic development and infrastructure projects. Sponsored by House Majority Leader Mike Turzai (Allegheny), House Bill 2175 reduces the state’s borrowing power for capital projects by roughly $3 billion.

About 8,000 RACP items have been authorized since 1999, but many have come under fire as pet political projects. Under HB 2175 any projects not approved before the end of 2011 would be removed from the list and have to reapply, meeting stricter program criteria.

The bill decreases the debt limit from $4.05 billion to $3.5 billion, with the ceiling dropping by $50 million per year until 2020, when it then drops to $150 million each year until it reaches a new ceiling of $1.5 billion. This will bring the cap down close the 2003 level of $1.45 billion.

The bill was amended three times during debate on the House floor, and was recommitted to the Appropriations Committee. Many Democrats have criticized the bill stating that reverting to the 2003 level of funding does not provide enough capital for economic and community development projects statewide, especially with all corners of the Commonwealth experiencing higher costs for materials and construction.