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Controversial gas tax shift could rebuild Pennsylvania roads

By   /   February 5, 2013  /   9 Comments

By Melissa Daniels | PA Independent

BUILDING BRIDGES: Pennsylvania Gov. Tom Corbett is proposing a multi-year transportation funding plan that would raise the oil company franchise tax and lower the flat gasoline tax.

HARRISBURG — Pennsylvania could finally see some serious improvements in roads and bridges, but only if lawmakers are willing to follow the governor’s plan to raise funds through a plan that might also boost gas prices.

On the same day Gov. Tom Corbett introduced his 2013-2014 budget proposal, he announced a plan to generate more than $5 billion in transportation funding over five years, mostly from a change in the way gas taxes are levied.

Under Corbett’s plan, funds would come from lowering the flat tax paid by consumers while increasing the tax gas stations pay on fuel.

Corbett and other administration officials maintain this wouldn’t necessarily produce raise gas prices, as pump prices are determined by a variety of factors, including the price of crude and location.

Next year, Corbett predicts, the state spend about half a billion dollars on roads, bridges, public transportation, locally owned roads and other system-wide improvements. By the fifth year of the plan, the state’s transportation system would see about $1.8 billion worth of improvements.

The Corbett plan may go nowhere in a state with dozens of lawmakers who have taken the no-new-taxes pledge.

House Majority Leader Mike Turzai, R-Allegheny, said lawmakers on both sides of the aisle want to discuss solving the state’s transportation funding issues.

Turzai said he did not think “the governor’s proposal is necessarily the definitive proposal” or that it will get passed by the June 30 budget deadline.

But he promised to give the proposal a “very, very serious look,” he said.

“I think there’s going to be a significant discussion about what the size and shape of funding, any additional funding, for transportation would be,” Turzai said.

House Appropriations Chairman Bill Adolph, R-Delaware, said that if lawmakers can pass a transportation bill, it would have to have bipartisan support.

During his budget address, Corbett said transportation is the “bloodstream” of the state’s economy. About a half-trillion dollars worth of goods and services move across the sprawling Keystone State annually, along with 1.5 million school children riding on buses, he said.

“If it fails, our economy fails,” he said.

Corbett maintained that he does not think this proposal is a tax increase.

The oil company franchise tax applies to gasoline sold at the wholesale level. The cap is applied to the first $1.25 of a gallon. Corbett’s proposal would phase that down and remove it completely within five years.

Corbett, who heralded the state’s energy industry in the same speech, said it was “time for oil and gas companies to pay their fair share.” Many lawmakers, gathered in the House chambers for the address, applauded.

“This is not a new tax, nor am I proposing to increase the rate of the existing tax,” Corbett said during his address. “I am simply saying the time has come to apply it to the full value of what the company is selling.”

At the same time, the flat tax on gas paid by consumers would be lowered by two cents over the next two years to 10 cents. Each cent brings in about $50 to $60 million a year.

Secretary of Transportation Barry Schoch made the case for the plan in an afternoon press conference.

“If we don’t do anything, we’re going to reduce our spending on roads and bridges,” he said. “We know we have an old system and it will simply exacerbate the problem.

Not only is this unsafe, Schoch said, but it’s bad for the state’s economy.

Still, total funding in Corbett’s plan falls short of what past projections have recommended, leaving some pushing for more. Corbett’s Transportation Funding Advisory Committee recommended about $2.5 billion worth of annual investments.

Under Corbett’s announced plan, there would still be more than 3,500 structurally deficient bridges in the state, and about 7,000 miles of “rough” roads by 2020. Right now, there are about 4,500 structurally deficient bridges and about 10,000 miles of “rough” roads.

Schoch said the plan was made keeping in mind what can be delivered to lawmakers as a bipartisan solution – and finding a “sweet spot.” Schoch said additional fees and services to expand the plan to include more isn’t off the table, even though the governor isn’t in favor of it.

“We want to be sure we get legislative action on this,” Schoch said.

This new proposal isn’t enough for some lawmakers who’ve been pushing for more. State Sen. Daylin Leach, D-Montgomery described the transportation plan as a “timid, tiny move” and encouraged Corbett to raise more revenues in taxes and fees.

“I don’t care whether he calls it an ostrich. The point is that it needs to happen,” Leach said.

However ambitious Corbett’s plan seems to some lawmakers, it still leaves work on the table.

State Sen. John Wozniak, D-Cambria, said the final plan was a long way from the recommendations of the transportation commission. And, he said he was not confident about the passage of a tax increase plan through a Republican-controlled General Assembly.

“There is a direct correlation between what you pay at the pump and the quality of the roads,” Wozniak said.

Contact Melissa Daniels at [email protected]


Melissa formerly served as staff reporter for Watchdog.org.