Pennsylvania transportation funding plan includes quarter fuel tax hike

By Keith Goble, Land Line state legislative editor | Thursday, April 18, 2013

A transportation funding package unveiled this week in Pennsylvania would help pay for roads, bridges and transit throughout the state. It includes a nearly 30-cent increase in the state’s fuel tax rate.

Senate Transportation Chairman John Rafferty, R-Montgomery, on Tuesday, April 16, announced a plan to raise $2.5 billion by the third year to help address a transportation system that he says is in dire need of attention.

“Pennsylvania is at a crossroads, and we must take action now,” Rafferty said in prepared remarks. “We simply cannot continue to ignore these pressing needs, which are directly related to public safety and economic development.”

Most of the new annual revenue would come via ending a cap on a tax on wholesale fuel prices.

The change was touted in 2011 by an advisory commission to the governor on transportation funding. The Transportation Funding Advisory Commission estimated a $3.5 billion annual shortfall in funds needed for roads, bridges and transit.

Lifting a cap on the oil company franchise tax is expected to increase the per-gallon tax on fuel about 28 cents over three years. Currently, the tax applies only to the first $1.25 per gallon of the wholesale price.

Eliminating the cap on fuel prices now exceeding $3 per gallon would go a long way to help the state raise about $1.9 billion annually for roads and bridges. About $510 million would be applied to transit while airports, ports, rail and bike routes would claim another $115 million.

“We aren’t just going to resurface roads and paint bridges. We’re actually going to add capacity to our transportation infrastructure: lanes on roads, new intersections and new bridges,” he said.

Rafferty’s plan would also reduce the “flat tax” portion of the fuel tax by 17 percent over two years. The change is estimated to reduce the price at the pump by 2 cents per gallon.

Other changes include phasing out Act 44. The six-year-old law requires the Pennsylvania Turnpike Commission to route $450 million annually to the state for roads and bridges.

Another part of the plan would stretch out vehicle registrations to every two years instead of annually. Driver’s license renewals would also be changed to every six years – up from every four years.

The plan is similar to Gov. Tom Corbett’s funding proposal announced early this year. The governor’s plan called for raising $1.9 billion by the fifth year.

Rafferty also wants to impose surcharges on traffic violations and tying fees for licensing, registration and permitting fees to inflation.

Ticketing for traffic offenses that affect insurance would have a $100 surcharge attached. Offenses that don’t affect insurance would be increased between $100 and $300.

The plan – SB1 – has the support of many top Republicans and Democrats at the statehouse. They will work on the initiative in the coming months and try to come up with a consensus for how to address the state’s transportation funding shortfall. Any agreement must also be approved by the governor.

OOIDA encourages Pennsylvania truckers to be involved in the legislative process.

To view other legislative activities of interest for Pennsylvania, click here.

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