Pennsylvania Senate advances fuel tax reform
One bill zipping through the Pennsylvania statehouse is touted to reform the state’s fuel tax collection.
On Jan. 1, Pennsylvania’s 57.6-cent gas tax rate increased 3.5 cents to 61.1 cents per gallon. The 74.1-cent diesel rate rose 4.4 cents to 78.5 cents.
The changes are due to the state’s variable-rate fuel taxes.
Since 2013, the state taxes increase automatically when the average fuel price exceeds $2.99 per gallon. The Pennsylvania Department of Revenue determined that over the past year, the average price statewide exceeded that amount triggering the latest increase.
Push to end regular increases
The Senate voted 29-19 on Wednesday to advance a bill to put a stop to automatic increases in gas and diesel excise taxes.
Senate Transportation Committee Chairman Wayne Langerholc, R-Cambria, is behind the bill to roll back the excise tax rates to the amounts collected on Dec. 31. Additionally, the average wholesale price would be set permanently at $2.99 per gallon.
Langerholc said the changes would end automatic tax hikes.
“My legislation will cut the gas tax before hardworking families must pay the second highest gas tax in the nation,” Langerholc said in a news release. “At a time when our constituents are faced with rising costs at the pump, grocery store and utility bills, no elected official should be voting against this legislation.”
Instead, advocates say lawmakers should be responsible for making decisions on possible fuel rate increases.
Critics point out the state DOT has a nearly $10 billion funding gap for road and bridge work. They say that resetting the tax rates would result in the state losing out on $225 million.
The Senate Transportation and Appropriations committees approved the bill earlier in the week. SB35 next heads to the House.
Motor License Fund
The Senate Transportation Committee voted 9-5 to advance a separate bill to cap how much money is routed from the state’s motor license fund for state police operations.
For years, money from the state’s motor license fund was transferred to the state police. The amount reached three-quarters of a billion dollars by the 2016 budget year, according to state figures.
As a result, money that was intended for essential road and bridge work was instead being used to cover trooper expenses.
Transfers reduced
In 2016, the state applied the brakes on the transfers. Instead, a process was implemented to gradually reduce the amount of money routed from roads and bridges to the state police.
Specifically, funding from the motor license fund to troopers was capped at $800 million with a schedule to decrease that amount to $500 million over the next decade.
Overall funding to troopers was not affected. The state’s general fund has been tapped to cover the difference.
Legislative cap
Another bill proposed by Langerholc would mandate the cap via legislation instead of through prior fiscal code.
SB121 would establish the reduced transfer schedule in statute.
The bill now heads to the Senate Appropriations Committee before it can move to the full Senate. LL
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