By Mike Dunn

PHILADELPHIA (CBS) — The Pennsylvania Department of Transportation is giving itself veto power over billboards along the highways that run through Philadelphia.

State officials say the move is aimed at ensuring that Pennsylvania doesn’t lose out on millions of dollars in highway funding from the federal government.

Since the 1970s, Penndot has allowed Philadelphia’s mayor and City Council to regulate billboards along state and interstate highways, but Penndot officials now fear that federal highway dollars are at risk without their direct oversight.

Penndot spokesperson Erin Waters-Trasatt says Penndot acting secretary Leslie Richards has notified the feds that the state transportation agency will now have final say on outdoor advertising in Philadelphia.

“In reviewing what there is on the ground in the city, and what allowances there might be, we just determined that Penndot could most effectively manage all these applications.  We have an obligation, federally, to have effective management of these outdoor signs, or we could have ten percent of our federal highway dollars withheld,” Waters-Trasatt tells KYW Newsradio.

She says the state currently receives $1.5 billion from Washington for highways, so a ten-percent cut would represent $150 million.

Mark McDonald, a spokesman for Mayor Nutter, points out that the move adds a Penndot approval layer over the city’s initial zoning approval only for locations adjacent to the highways — which include I-95, the Schuylkill Expressway, the Vine Street Expressway, Market Street, and Broad Street.

For the rest of the city, he said, there is no change, and basic zoning regulations still apply.

Penndot’s Waters-Trasatt says the state agency’s action was a long time coming.

“We have been working on this with the city and the feds for a few years now.  And we’ve been evaluating some of the control, and how the advertising devices (billboards) conform to federal guidelines.  So, based on those reviews, we’re going to be taking on that management,” she said today.

And she says this is not related to the recent approval by City Council of so-called “Urban Experiential Displays,” or UEDs, which are large, 3D advertising structures.  One of those was approved for North Broad Street, outside the Pennsylvania Convention Center.

“The recent city legislation was the not direct cause of the legislation.  There was similar timing, but that was purely coincidental,” Waters-Trasatt says.

And going forward, she says, Penndot will review all city laws and existing billboards.  Any new billboards along state roads would need to go through Penndot’s permitting process.

“We’ll be working with city officials as needed, and the outdoor advertising industry, to review the signs and regulations that are out there right now, just to see what can remain and if any changes need to be made.  As any applications for new devices (billboards) come in, moving forward, we will be evaluating those applications,” she said.

In addition to the UED legislation, City Council last week approved and sent to the mayor a measure that would allow more digital billboards in the city, as long as older billboards are taken down.

It’s unclear what effect Penndot’s action would have on that measure, which was awaiting action by Mayor Nutter.

Penndot’s move does exempt a portion of Market Street East, where a digital sign was recently installed atop the old Lit Brothers building.