New Castle News

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February 14, 2014

Gas tax hike makes state nation’s sixth highest

CNHI — A tax increase for road and bridge repairs helps make Pennsylvania the sixth most expensive place to buy gas in the United States, according to AAA.

Only motorists in New York, Connecticut, California, Alaska and Hawaii pay more.

Regular gas here costs $3.52 per gallon, according to AAA.

The average price of gas in the Commonwealth is about 20 cents higher than the national average. A year ago, it was 13 cents higher. The 7-cents-per-gallon swing is roughly equal to the increase that analysts predicted should the state remove a cap on the wholesale tax on gas, as it did Jan. 1.

The tax increase is tied to $550 million in road and bridge projects included in Gov. Tom Corbett’s $1.2 billion transportation budget for 2014-15.

The good news is that the overall price of gas has dropped since an initial up-tick when the new gas tax took effect. And the price is down compared to last year.

“It did show up at the pump,” said David McCorkle, president and chief executive officer of the Pennsylvania Food Merchants Association, which represents grocery stores and convenience stores, many of which sell gas. “That increase was quickly offset by the decrease in the cost of crude oil.”

“So far, so good,” McCorkle said. “We are concerned for consumers. But we recognize that we have to improve our roads and bridges.”

An AAA analysis Tuesday attributed the actual drop in gas prices to changes in the overall energy market. Extremely cold temperatures have kept many people from hitting the roads, driving down demand, according to AAA. Also, the first weeks of 2014 have not seen some of the overseas tumult and production problems that often translate into mid-winter price spikes.

Such sanguinity is not universal.

“That’s nonsense,” said Jennifer Stefano of the anti-tax Americans for Prosperity. “The government should not be raising taxes just because they think no one will notice.”

Stefano said Corbett and Legislature “took the easy way out,” instead of seeking alternatives to pay for road and bridge repairs. Though the price of gas has been down, she said, it will invariably go back up come summer.

“For those of us who have jobs, this is just another burden that means we have less to spend” on other things, she said.

Lower overall prices have softened the blow of the tax increase on large fuel consumers — such as trucking companies, said Jim Runk, president and chief executive officer of the Pennsylvania Motor Truck Association.

Should fuel prices become too much of a burden, trucking companies typically add a surcharge to their bills, Runk said. A company in a competitive situation may not be able to pass on increased costs to customers, meaning those fuel costs become a burden.

Runk said most carriers already operate on thin profit margins.

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Changing gas prices

•Pennsylvania average, today — $3.52

•A year ago — $3.72

•United States average, today — $3.30

•A year ago — $3.57

•Ohio average, today — $3.40

•A year ago — $3.68

•Maryland average, today — $3.34

•A year ago — $3.59

•New York average, today — $3.63

•A year ago — $3.92

•New Jersey average, today — $3.25

•A year ago — $3.53.

(Sources: Gasbuddy and AAA)

 

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