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State Gas Tax Attention Turns to Pennsylvania

Continuing our focus on the need to invest in transportation infrastructure and unwillingness to raise state gas taxes, the most recent proposal comes from Gov. Tom Corbett: Reducing the excise tax while increasing the wholesale gas dealer tax.
February 7, 2013, 12pm PST | Irvin Dawid
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Much attention has been placed on VA Gov. Bob McDonnell's plan to replace the 17.5-cents per gallon state gas excise tax with a .8% increase in the general sales tax. Kris Maher includes that proposal, as well as plans from MassachusettsMichigan, Wisconsin, West Virginia and statistics on state gas tax increases (or the lack thereof) in this piece, and gives particular attention to the plan released Feb 05 by Republican Governor of Pennsylvania, Tom Corbett, who had promised not to raise taxes. However, Corbett states that "(i)t is time for oil and gas companies to pay their fair share of the cost of the infrastructure supporting their industry".

In Pennsylvania, where infrastructure woes are among the worst in the nation, Gov. Tom Corbett unveiled a plan Tuesday to generate nearly $5.4 billion in new revenue over five years by lifting a cap on gas taxes paid by wholesale gasoline dealers, while lowering the tax paid by consumers by two cents per gallon.

The state had the nation's highest percentage—26.5%—of bridges designated as structurally deficient, meaning engineers have identified a major structural defect, according to a 2011 report (PDF) by Transportation for America, a coalition of business and transit groups advocating for increased transportation spending. The American Society of Civil Engineers gave the state a grade of D-minus for its roads in 2010, noting that 38% of the state's roads were rated fair or poor.

The Corbett plan was "was met with criticism almost immediately."

Peter Javsicas, executive director of PenTrans, a coalition of engineering, architectural and construction firms, said the governor should be "commended" for proposing new tax revenue despite likely opposition by some state Republicans. But he said he believes higher costs will eventually be passed on to consumers and he wanted more funds to go to transit systems.

John Kulik, executive vice president of the Pennsylvania Petroleum Association, which represents gas distributors that pay the tax, said it was difficult to say exactly how much gas prices would increase for consumers, but that "it's going to have an impact."

The lack of funding for transportation infrastructure crosses party lines, affecting most states regardless of political party of the the governor. "According to the National Conference of State Legislatures,

  • Fourteen states haven't raised their gas tax in two decades,  
  • Eight states and Washington, D.C., have raised gas taxes since 2008. 
  • Five states index their gas tax to inflation."

Maher includes the recommendations issued in late January by a Wisconsin transportation-funding commission appointed by Repubican Gov. Scott Walker to:

  • Raise the gas tax by 5-cents per gallon
  • Create a mileage-based registration fee

Drivers would report their odometer readings when renewing their registration each year and pay a fee based on how many miles they drove.

There is a 5-minute audio report featuring the reporter, Kris Maher, interviewed by Hank Weisbecker of The Wall Street Journal Online that appears on the webpage.

Note: Access to this subscription article that appears on pg. 2 of print edition may expire on Feb. 13 for non-subscribers.

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Published on Wednesday, February 6, 2013 in The Wall Street Journal - U.S. News
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