Pennsylvania takes first step toward quarter fuel tax hike

By Keith Goble, Land Line state legislative editor | 5/8/2013

A $2.5 billion plan to fund transportation work in Pennsylvania is on the move at the statehouse.

The Senate Transportation Committee voted 13-1 on Tuesday, May 7, to advance a long-term funding package that would help pay for roads, bridges and transit throughout the state. It could result in a nearly 30-cent increase in the state’s fuel tax rate.

Senate Transportation Chairman John Rafferty, R-Montgomery, said the state must act now to improve public safety and economic development.

“We can’t put off projects. The time to address our infrastructure needs is now,” Rafferty said in prepared remarks.

His plan would raise $2.5 billion by the third year. 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 could increase the per-gallon tax on fuel about 28 cents over three years because the companies are expected to pass along much of the increase to consumers. Currently, the tax applies only to the first $1.25 per gallon of the wholesale price.

Sen. John Wozniak, D-Cambria, pleaded at the meeting for the public to understand why it’s time for the state to increase fuel tax rates for the first time since 1997.

“We’re not doing this because we want to do it. We’re doing it because we have to do it,” he testified.

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.

“This legislation will allow us to repave highways and refurbish bridges, but also do something that hasn’t done since the 90s: Expand infrastructure in the commonwealth,” Rafferty told the committee before the vote.

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.

Rafferty’s plan also would impose surcharges on traffic violations and tie 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 bill – SB1 – awaits further consideration in the Senate Appropriations Committee. If approved there, it would move to the Senate floor before it could advance to the House.

Rafferty told lawmakers this week that he encourages discussion on how to improve the bill.

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

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