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Penn. Governor Signs New Transportation Funding Law Changing Fuel Taxes

November 25, 2013

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Pennsylvania Gov. Tom Corbett on Monday signed comprehensive transportation legislation that some say will dramatically hike fuel prices in the state because of a new tax formula.

The new law invests $2.3 to $2.4 billion into the state's roads and bridges by the fifth year of the plan.

"This is an investment in the safety of our citizens and the progress of our economy. It will create more jobs and keep Pennsylvanians moving across safe, world-class highways and bridges," Corbett said.

By the fifth year of the plan, the transportation package will invest an additional:

  • $1.3 billion annually for state roads and bridges;
  • $480 million to $495 million annually for public transportation;
  • $237 million annually for local roads and bridges;
  • $144 million annually in a multi-modal fund;
  • $30 million annually for dirt, gravel and low-volume roadways; and
  • $86 million annually for Pennsylvania Turnpike expansion projects.

Partial funding for the new transportation package is being derived from the elimination of the flat 12-cent fuel tax and uncapping of the wholesale, oil company franchise tax. 

Critics claim this will result in the state’s 39.2-cent-per-gallon diesel tax and 32.3-cent-per-gallon gasoline tax increasing to as much as near 66 cents per gallon for diesel and around 48 cents for gasoline in five-years. Supporters claim this isn’t true because it is impossible to predict the price of gasoline and diesel half a decade from now.

Pennsylvania law states that revenues from fuel taxes must be directed to highway and bridge-related costs and state police patrol functions and not used for any other purpose. Many road and bridge projects are slated to start next spring..

 

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