Pennsylvania gas taxes would rise five cents a year under Gov. Corbett's budget

Posted: February 07, 2013

Pennsylvania gasoline taxes would rise an average of about five cents a gallon a year over the next five years to pay for a $1.8 billion increase in transportation funding under the budget proposed Tuesday by Gov. Corbett.

Corbett, who vowed during his election campaign not to raise taxes, said the change would not be a tax increase but merely the lifting of "an artificial and outdated cap" on a wholesale tax paid by oil and gas companies.

Corbett called for doing away with the cap on the "oil company franchise tax" to allow it to rise by about 28.5 cents over five years in three installments. That increase presumably would be passed on to motorists at the pump, though state officials said gasoline dealers might absorb part of it.

At the same time, Corbett asked for a one-cent-a-gallon reduction in the liquid fuels tax for each of the next two years. That component of the gas tax is now 12 cents per gallon.

Taken together, the changes would mean an 82 percent increase in the state gas tax by 2018, rising from the current 32.3 cents per gallon to 58.8 cents if the full wholesale increases were passed along to drivers.

The last time the state gas tax was increased was in 1997.

The changes would produce about $510 million in additional transportation funding in the first year and $1.8 billion a year by the end of five years. The money is needed to repair roads and bridges and maintain transit systems, Corbett said Tuesday.

The amount of roadway in poor condition rose from 7,500 miles in 2007 to more than 10,000 miles last year. The state has more than 4,000 "structurally deficient" bridges.

SEPTA faces a $38 million operating shortfall next year even with a planned fare increase. Corbett's proposal calls for a $40 million increase for all public transit in Pennsylvania next year, so SEPTA officials were underwhelmed by the plan.

"It's a starting point," general manager Joseph Casey said. "But we've been woefully under-invested-in for many years, and we have to start rebuilding our system."

Transportation Secretary Barry Schoch said any gas-tax increase would be relatively small in the fluctuating cost of a gallon of gas - currently about $3.65 a gallon in Pennsylvania.

Corbett's plan is likely not to be the final word on transportation funding, said State Sen. John C. Rafferty Jr. (R., Montgomery), chairman of the transportation committee.

"He provided a framework for us to consider," Rafferty said. "We will have hearings next week, and hopefully we can get something we can both live with."

Rafferty said lawmakers would look to increase the level of funding for SEPTA and other transit agencies, with investments from private-public partnerships.

Mayor Nutter said he was concerned about funding for mass transit. "We desperately need increases in transportation funding for bridges, roads, and jobs," Nutter said.

Under Corbett's proposal, most of the additional funding would go to fix roads and bridges: $1.2 billion for state-maintained and $200 million for locally owned roads and bridges, by the plan's fifth year.

About $250 million a year would go to public transit by the fifth year of the plan, with SEPTA expected to receive about two-thirds of that.

Along with higher gas taxes, the plan calls for replacing Pennsylvania's current annual vehicle registration with a two-year registration, and the current four-year driver's license with a six-year license.

Fees would be adjusted to reflect the longer terms, so drivers would pay $72 every two years instead of $36 a year for registration, and $44.25 every six years for driver's license renewal instead of $29.50 every four years.

Corbett's proposal would also require local counties to chip in more for public transit, increasing the local share from the current 15 percent of operating subsidies to 20 percent.

He also proposed to eventually end the $450 million annual contribution from Pennsylvania Turnpike tolls to the Department of Transportation for statewide roads, bridges, and mass transit.


Contact Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com

Inquirer staff writer Amy Worden contributed to this article.

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