Responding to pressure from Pennsylvania residents about rising fuel
costs, Gov. Ed Rendell said last week he may ask state lawmakers to temporarily
lift the state’s per-gallon fuel tax.
In the meantime, The Pennsylvania Department of Transportation has
temporarily waived regulations that prohibit commercial haulers that transport
diesel fuel and gasoline from operating more than 11 hours per day. Rendell
requested the waiver.
The waiver, which remains in effect until Sept. 14, only applies to
Rendell said he is also keeping a close eye on what drivers are paying
to fuel up.
“We are monitoring what happens to prices. If you ask me today, ‘Do I
think that the price increase justifies that?’ The answer is no, but we are
going to monitor prices and see where it goes,” Rendell told the Philadelphia Enquirer.
Lifting the tax on fuel would require legislative approval. The General
Assembly is not scheduled to return to the capitol until the end of September.
Such action would not include sales taxes on fuel.
The governor said if he decided to pursue a tax holiday, he could call
a special session at anytime to tackle the fuel tax question.
A loss of tax revenue wouldn’t come without a cost, Rendell said.
“There’s a price that we pay if we do that,” Rendell told news
reporters Sept. 1 at a Harrisburg service station. He said it would “take a big
hunk” out of the $2 billion the tax generates each year for road and bridgework
throughout the state.
However, Pennsylvania wouldn’t be doing truckers any real favors by not
collecting the fuel tax. Truckers would still be required to report and pay for
their International Fuel Tax Agreement miles in the state.
Simply put: If a fuel tax holiday is granted,
truckers who buy fuel in Pennsylvania won’t be paying for the tax on the front
end, but they would have to pay for it later through IFTA quarterly filings.
And that goes for any state that doesn’t waive IFTA miles.
“As more states are looking closely at the
possibility of fuel tax holidays, truckers need to be aware that the savings
they may realize at the pump could be short-lived,” Todd Spencer, executive
vice president of OOIDA, said.
“Even though you don’t pay the tax on the
front end, if you’re running through states that have not waived it, you could
wind up owing a sizeable chunk on your quarterly reports.”
Rendell said he is also closely watching for reports of price gouging
and whether a fuel shortage is approaching.
If supply is restricted enough, the governor
said he could enact a “fuel emergency” in the state. Declaring a fuel emergency
would give him the authority to prosecute price gougers, rollback prices and
institute certain rationing efforts, the Enquirer reported.
Pennsylvania isn’t alone in its pursuit of
combating higher prices at the pump brought on by Hurricane Katrina.
Georgia Gov. Sonny Perdue has issued a month-long moratorium
on the state’s 7.5-cent-per-gallon tax on gasoline and diesel fuel. Unlike
proposals in other states, the order also includes a suspension of the
state’s 4 percent sales tax on fuel until the end of September. The tax breaks
will cost the state about $75 million in tax revenue.
Other states considering fuel cost relief
- Wisconsin Republicans are pushing a plan to give residents
a fuel tax holiday for the rest of the year. Instead, Democratic Gov. Jim
Doyle wants to repeal the state’s minimum markup requirement for diesel
Sept. 1, a new Hawaii law limits the wholesale price of gasoline, making
it the first state in the nation to limit prices.
- A New Jersey
lawmaker is considering legislation that would mimic Hawaii’s price cap – and include diesel fuel.
- Democrats in
the Missouri House want Gov. Matt Blunt to expand the agenda of the
special session that started Tuesday, Sept. 6, to include a two-week fuel
tax holiday that would cut the state’s 17-cent-a-gallon tax on diesel and
gasoline to 7 cents a gallon. The Republican governor’s office has called
the plan a “risky scheme.”
– By Keith
Goble, state legislative editor
Land Line staff editor Jami Jones contributed to this report.