New Castle News

Closer Look

January 31, 2013

Transportation plan divides state lawmakers

HARRISBURG — Days before Gov. Tom Corbett is expected to publicly announce a transportation funding plan, lawmakers are divided.

Some of them object to lifting a cap on the wholesale tax on gasoline, while others maintain there is simply no other funding avenue available to generate the kind of money needed.

The governor’s plan to remove the cap on the oil and franchise tax, which is now set at $1.25 a gallon, is projected to generate $1.9 billion in revenue.

One lawmaker said he had heard estimates suggesting that lifting the cap would translate into a 20-cents-a-gallon increase at the pump. Other lawmakers said they have not seen any estimates of what lifting the cap would mean at the pump, but most said they believed it would lead to an increase in prices.

A copy of the governor’s proposal given to lawmakers indicates Corbett is planning to devote $1.2 billion for the Pennsylvania Department of Transportation to fix roads and bridges, $250 million in new revenue for mass transit, $200 million in revenue for local roads and bridges, and $75 million for “multi-modal” transportation including rail, aviation and port.

The governor’s proposal also would hold the line on driver’s license and vehicle registration fees, while extending the amount of time those license and registration documents are valid. Under the plan, a driver’s license would be valid for six years instead of four and vehicle registrations would only need to be renewed every two years.

Sen. Gene Yaw, a Republican from Lycoming County said that he does not particularly believe that lifting the cap is the same as a tax increase. But “the bottom line is, we need money to repair roads and bridges.”

The question of whether the move would be a tax increase or not looms large because Corbett and some Republican lawmakers have taken no-tax-increase pledges.

Other lawmakers do not seem to be sold.

“It absolutely is a tax increase that will only get us halfway” to the $3.8 billion amount a transportation funding advisory commission suggested is needed, said Rep. Gary Haluska, a Democrat from Cambria County.

If the state lifts the cap on wholesale taxes, Haluska said, it will lead to an increase of about 20 cents a gallon in prices at the pump.

Any suggestion the move would not be a tax increase would be a ploy, Haluska added.

A more equitable way, he suggested, would be to more widely employ tolling as a means of generating revenue to pay for highway and bridge work.

Haluska said the plan to toll Interstate 80 was rejected because the federal government would not endorse Pennsylvania’s proposal to devote some of that money for mass transit. If the state were to rework its approach so all revenue from tolling is devoted to maintaining the roads being tolled, it is more likely the federal Transportation Highway Administration would give its approval.

Haluska said tolling other interstates would relieve the financial stress being put on the Pennsylvania Turnpike.

“If you toll a lot of our major interstates, the tolls won’t have to be as high on the turnpike.”

It is not only Democrats who have questions about the plan.

State Rep. Brad Roae, a Republican from Crawford County, said he has never supported a tax increase and pointed to a variety of ways the state could spend its transportation dollars more wisely.

“We need to look at all the money we are wasting before we start talking about asking people to put more money in the pile.”

Roae said the state spends too much money subsidizing the cost of mass transit — only 5 percent of the population uses mass transit, but it receives 15 percent of transportation funding. If the state spent less subsidizing public transit, PennDOT would have more money to fix roads and bridges, Roae said.

In addition, a $1-per-tire fee paid on every new tire is directed to mass transit.

“When you buy four new tires, you give $4 to mass transit. If we are going to have a tire tax, it should go to the roads and bridges that those tires are driving on, not lower bus fare for people who use mass transit.”

A department of revenue spokeswoman said the tire fee generated $10.7 million in fiscal 2011-12.

Roae’s concerns are similar to those expressed in a memo from House Majority Leader Mike Turzai, obtained by the Associated Press last week, in which he indicated that before there is any increase in taxes, the state’s transportation agencies must thoroughly demonstrate they are using their existing funding responsibly.

The concerns over the tax increase may be less problematic in the Senate.

“The Senate tends to be more moderate,” Yaw said.

While there may be an increase in gas prices from lifting the gas cap, Yaw said, he has not seen any credible estimates about how much impact there would be.

Sen. John Wozniak, a Democrat from Cambria County and minority chairman of the Senate transportation committee, said lifting the cap on the wholesale gas tax is the easiest way to generate the almost $2 billion.

“We can’t do anything until the governor mans up and does what he has to do and lays his plan out so we can start negotiating.”

But the infusion of construction spending that would result from the governor’s transportation plan “would create 10,000 construction jobs,” Wozniak said.

“I’ve talked to private contractors who have not purchased equipment in a decade,” Wozniak said. Those contractors would likely begin to order new equipment to meet the demand created by the state spending.

“There will be a multiplier effect.”


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