Pennsylvania bills tap tobacco, liquor to benefit roads

By Keith Goble, Land Line state legislative editor | 5/2/2013

Pennsylvania state lawmakers are pursuing various plans to help boost revenue for transportation. The state’s Transportation Funding Advisory Commission estimated a $3.5 billion annual shortfall in funds needed for roads, bridges and transit.

One bill would tap sales of cigars and smokeless tobacco to raise revenue for transit, roads and bridges.

The plan from Rep. Ed Gainey, D-Allegheny, would raise $44 million annually through a 25 percent tax of the wholesale price on cigars and smokeless tobacco. Cigarettes would be exempt from the additional tax.

“Just about everywhere in the United States, people pay a state excise tax when they buy cigars, chewing tobacco, snuff or loose tobacco,” Gainey said in a news release. “Pennsylvania is one of only two states (Florida) to exempt cigars from taxation and we are the only state not to tax smokeless tobacco.”

Gainey said that he understands his proposal doesn’t fix the transportation funding needs for the state, but “I believe that doing nothing to help is far worse.” At a minimum, he said his bill could supplement the governor’s transportation funding plan.

In February, Gov. Tom Corbett announced his plan to pay for $1.9 billion each year in new funding for roads, bridges and transit throughout the state. It includes a nearly 30-cent-per-gallon fuel tax increase.

Sen. John Rafferty, R-Montgomery, has since introduced a similar proposal that includes uncapping the oil company franchise tax and vehicle fee increases.

Gainey’s bill – HB926 – is in the House Finance Committee.

Another bill, HB220, would rely on money from the sale of the state’s liquor system to boost transportation funding.

The governor has different plans for liquor money. Corbett proposed putting the estimated $1 billion toward education.

Rep. Jerry Knowles, R-Schuylkill, introduced a bill that would instead route the money to roads, bridges and transit.

“With the severe backlog of important transportation and infrastructure projects throughout the state, this is clearly the best use of the money from the sale of liquor and wine licenses,” Knowles stated.

The bill is in the House Transportation Committee.

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

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