Gas Tax Increase, Pennsylvania Commission Suggests

Staff | September 28, 2010

Key recommendations of Pennsylvania's Transportation Funding and Reform Commission were released November 13. For Highways and Bridges, they include: 1. Raise $900 million for state-owned highways and bridges by increasing oil franchise tax on the wholesale price of gasoline by 11.5 cents per gallon and increasing motor vehicle registration and license fees; 2. Raise $65 million for highways and bridges owned by counties and municipalities with 1-cent increase in oil franchise tax, and; 3. Save $120 million through measures such as streamlined project planning, better maintenance and preservation, and linking land use and transportation. For Mass Transit, the commission's recommendations include: 1. Raise $760 million for mass transit, with 75 percent from the state and 25 percent from counties and municipalities; 2. Increase realty transfer tax from 1 percent to 1.89 percent to raise state's share; 3. Enable counties and municipalities to raise their share through a 0.25-percent local sales tax, 0.20-percent earned-income tax, or 0.5-percent realty transfer tax; 4. Replace $589 million in current mass-transit revenue sources with existing revenue from state sales or personal-income tax; 5. Save $60 million through measures such as restructuring or eliminating routes with low ridership, reducing labor and management costs, and encouraging the use of private contractors, and revising fare policies; 6. Ease mass-transit tax burden by exploring public-private partnerships and finance capital projects through borrowing; 7. Distribute subsidies for operating costs based on formula using passengers and vehicle hours, and; 8. Give state transportation officials authority to review transit-agency performance.