Corbett's policy on gas taxes called into question

Posted: March 27, 2013

Why lower the gas tax to raise it?

That was a repeated question by Democratic state legislators and labor leaders Monday at a public hearing on Gov. Corbett's proposed transportation-funding plan.

Corbett's plan would cut one component of the gas tax and raise another, with a net effect of an average five-cent-a-gallon increase a year over the next five years if gasoline dealers passed the full impact on to motorists.

"Why not leave the liquid fuels tax where it is?" asked Rep. Joseph Markosek (D., Allegheny). "If you don't cut that two cents, your net gain is bigger. And we need it."

About two dozen legislators met with labor, business, and transportation officials Monday at the Convention Center to evaluate transportation-funding needs. The session was convened by the House Democratic Policy Committee.

"This is lunacy," said Pat Gillespie, business manager of the Philadelphia Buildings and Construction Trades Council. "Why reduce this tax two cents and then raise this other one?"

Corbett's plan 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 would go to repair roads and bridges and maintain transit systems such as SEPTA.

To get the money, Corbett proposes to eliminate a 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 is asking 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, and each cent produces about $60 million a year in revenue.

Transportation Secretary Barry Schoch said Corbett wanted to minimize the financial impact on motorists, and reducing the liquid fuels tax would help do that.

Taken together, the tax 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 Pennsylvania's gas tax was increased was in 1997.

Rob Wonderling, president of the Greater Philadelphia Chamber of Commerce, told the lawmakers that providing a comprehensive network of highways and public transit "is a core function of a vibrant, modern commonwealth."

Rep. Mike Sturla (D., Lancaster) attacked the prevalent Harrisburg notion that the rest of the state underwrites Philadelphia roads and transit.

In fact, he said, the reverse is true.

"That's been bugging me for 20 years," Sturla said. "Fifty percent of the roads in this state carry less than 2,000 cars a day.

"The guys from rural areas always claim they're subsidizing Philadelphia and Pittsburgh, but the subsidy for rural roads is much higher than for mass transit.

"We bend over backwards to make sure we have the best back roads in the nation."

Schoch said the administration was prepared to accept changes in its transportation-funding plan.

"I think whatever gets negotiated will get signed," Schoch said.


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

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