Pennsylvania's worn highways and sagging bridges would receive major overhauls under Governor Corbett's 2013-2014 budget proposal. To raise the $5 billion needed over the next five years to pay for it, the Governor proposes an increase in the oil franchise tax.
The state tax on a gallon of gasoline hasn't been increased in more than 15 years. But the Commonwealth's transportation system is in desperate need of repair, and that costs money.
Right now, when you pump gas, $.12 of the price goes towards the state's liquid fuels tax. Governor Corbett is asking the legislature to reduce that by $.10 over the next two years. The remainder of the tax you pay is called the oil franchise tax. This tax is put on the oil companies who pay for it.
Currently, the state assesses a levy of $1.25 per gallon. The Governor would increase that by $.28 over five years. Although the oil company will pay $1.53 per gallon, PennDOT doesn't think all of the increased tax will be passed on to the consumer.
Steve Chizmar of PennDOT says gas companies want to be competitive, so if they raise prices too high, they'll lose out in the end. “It’s based on the wholesale value of gas. None of us have a crystal ball to see what the price of gas is going to be in the future. And also we don’t believe the full amount is going to be passed on for the simple reason there are so many factors that play a role in how a gallon of gas is priced right now.”
Next year, the increased gas tax revenues would allow for increased spending of $300 million on the repairs of state roads and bridges. Nearly $40 million would be spend on public transportation and $80 million on local roads.
In five years, available funding would total over $1 billion.
Many are doubtful the Governor's plan will be enacted as planned. Some members of the General Assembly already say it doesn't go far enough, while others say it's too much.
The state tax on a gallon of gasoline hasn't been increased in more than 15 years. But the Commonwealth's transportation system is in desperate need of repair, and that costs money.
Right now, when you pump gas, $.12 of the price goes towards the state's liquid fuels tax. Governor Corbett is asking the legislature to reduce that by $.10 over the next two years. The remainder of the tax you pay is called the oil franchise tax. This tax is put on the oil companies who pay for it.
Currently, the state assesses a levy of $1.25 per gallon. The Governor would increase that by $.28 over five years. Although the oil company will pay $1.53 per gallon, PennDOT doesn't think all of the increased tax will be passed on to the consumer.
Steve Chizmar of PennDOT says gas companies want to be competitive, so if they raise prices too high, they'll lose out in the end. “It’s based on the wholesale value of gas. None of us have a crystal ball to see what the price of gas is going to be in the future. And also we don’t believe the full amount is going to be passed on for the simple reason there are so many factors that play a role in how a gallon of gas is priced right now.”
Next year, the increased gas tax revenues would allow for increased spending of $300 million on the repairs of state roads and bridges. Nearly $40 million would be spend on public transportation and $80 million on local roads.
In five years, available funding would total over $1 billion.
Many are doubtful the Governor's plan will be enacted as planned. Some members of the General Assembly already say it doesn't go far enough, while others say it's too much.