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Pennsylvania’s new gas tax

By Fritz Mayer
December 4, 2013

HARRISBURG, PA — Pennsylvania officials have taken pains to explain that House Bill 1060, which Gov. Tom Corbett calls “the most comprehensive piece of state transportation legislation in decades,” is actually getting rid of one tax.

Stephen Miskin, the press secretary for house majority leader Mike Turzai, sent out a release saying that the bill totally eliminates the 12 cent liquid fuel tax that consumers will pay until January 1, and there will no longer be a direct tax on consumers for gas.

But the bill will incrementally increase the oil company franchise tax, which oil companies pay, and which most analysts say is and will continue to be passed on entirely to consumers. That tax is based on the wholesale price of gasoline, and is currently capped at a level that was locked-in back in 1983, when the cost of gas was $1.24 per gallon.

Beginning on January 1, 2014, that price will be hiked by nine cents, and there will be additional increases through 2017, when the cap will be ended entirely and the tax will be based entirely on the price of gas at the wholesale level.

Corbett, who according to a poll released on November 26 by Public Policy Polling, “is now the most unpopular governor of 43 on which PPP has polled,” and who gains approval for his performance from only 24% of Pennsylvanians, is calling the passage of the bill a victory.

He said at a public appearance last week, “As a result of our elected officials acting in a true bipartisan spirit, Pennsylvanians all across the commonwealth will benefit from their efforts—keeping our families safe, helping our commuters get to and from work and creating good paying jobs.”

A press release from PennDot says that by the fifth year of the plan, the bill will provide $1.3 billion annually for state roads and bridges; $480 million to $495 million annually for public transportation; $237 million annually for local roads and bridges; $30 million annually for dirt, gravel and low-volume roadways. Many road and bridge projects are slated to start next spring.

The bill also includes an increase of 60% in the amount of money the state grants to local governments to build and maintain roads, and it will increase the fees attached to licenses and registrations over time.

As much as some are celebrating the legislation, others are aware that the public is likely to see the bill as a tax increase.