Pennsylvania to hike fuel tax

| 11/29/2004

Truckers traveling in Pennsylvania will have to fork over an additional 4 cents a gallon at the pump after a higher state fuel tax kicks in Jan. 1, with the windfall going for road and bridge projects and to help bail out the state’s struggling mass transit programs.

Gov. Ed Rendell anticipates receiving $133 million more from the state’s oil company franchise tax in 2005, local media reported. The governor has not yet decided how to distribute the extra dollars.

The oil tax, enacted in 1981, is levied on fuel sold by oil companies to distributors, and it is set to increase the first of the year. The tax is set each year based on a formula that factors in the previous year’s average fuel prices. Rising fuel prices in the past year caused the tax to jump.

Though levied on wholesalers, the tax ultimately will be passed on to truckers and other consumers.

Although the Rendell administration hasn’t ruled out using the money to help the deficit-burdened Philadelphia and Pittsburgh transit agencies, Rendell does not appear enthusiastic about those options.

Last week, he continued to urge state lawmakers to return to the state capitol to resolve the transit crisis. The Legislature ended its two-year session Nov. 21, nine days early, without acting on a plan backed by the governor to hike several fees on motorists to help support the state’s transit agencies.

Pittsburgh’s Port Authority faces a $30 million deficit and plans to raise its base fare by 75 cents to $2.50, lay off 500 employees and cut 70 routes, including all night and weekend service, the Pittsburgh Post-Gazette reported.

Philadelphia’s transit agency faces a $63 million deficit and proposes similar measures.

Part of Rendell’s hesitation to use the fuel tax revenue to bail out transit is the move would have to be approved by regional planning agencies that have some say about how transportation money is spent.

With the uncertainty of how the additional fuel tax revenue will be spent, the Pennsylvania Department of Transportation is putting two plans in place: one to spend the money on roadwork and the other to spend it on transit.

Rendell estimates the state’s two largest transit agencies need $190 million to cover deficits for two years. In addition to the $133 million windfall, PennDOT would have to cut $57 million in highway and bridge projects if the governor chose to aid transit.