Infrastructure & Environment

New Pennsylvania Law Will Increase Transportation Funding by Billions

The legislation will eventually mean more than $2.3 billion annually in additional funds for transportation infrastructure.
by | November 25, 2013
Pennsylvania's Interstate 76 flickr/ Dougtone

Pennsylvania Gov. Tom Corbett signed legislation Monday that will eventually provide an additional $2.3 billion annually for infrastructure.

The legislation scraps the state's 12-cent gas tax and lifts a cap on the wholesale taxes of fuel. Those taxes would then be passed on to consumers. The tweak would reportedly translate to a 28 cent-per-gallon increase on gas taxes for drivers, up from the current 32.2 cents.

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

The Keystone State now joins a slew of others that have enacted major boosts in infrastructure funds, in part due to a stagnant federal funding for transportation.

A 2011 report by Corbett's Transportation Funding Advisory Commission predicted a $7.2 billion gap between the state's transportation needs and transportation revenue within 10 years.

Pennsylvania -- like the federal government, and other states -- had been vexed by a system in which gas taxes had declining purchasing power over the years.

According to the 2011 study, the state had been collecting less fuel tax revenue, per mile driven, than at any time in its history due to increasing fuel efficiency of vehicles. Meanwhile, a gas tax that hadn't been increased since 1997 meant each dollar that was raised had less of an impact due to inflation.

The new law helps solve that problem, since the tax will increase as fuel prices rise. "Having that indexed so we didn't have to keep going back was a concern for a lot of people," says state Rep. Jeff Pyle, the prime sponsor of the bill. "We were going to do it right ... we don't want to have to come back and do this again."

The law also raises license and registration fees, which will be tied to inflation, and gives counties the choice to create their own $5 registration fee for local projects.

Statewide, the law will eventually mean $1.3 billion in additional funds annually for state roads and bridges, and as much as $495 million annually for public transportation.

"I do think this is enough to substantially go after the things that are ailing us," Pyle says. "What's cool about it is it really does translate very well for all the parts of the state." The legislation provides money for state roads and bridges, transit, local roads and bridges, and even dirt and gravel roads. The package ensures that both rural and urban lawmakers can claim a victory for their constituents.

The law isn't without controversy. Some conservatives objected to the hikes in gas taxes, while some liberals oppose a provision that raises the threshold for projects requiring that workers get paid prevailing wages. Still, in eventually passed in both chambers of the legislature by wide margins.

Lawmakers had spent almost the entire year debating the transportation funding package, which was initially introduced in March, and Corbett has long-discussed infrastructure as a priority.

But the legislation finally gained steam over the course of the last few months as Corbett and his staff became actively involved in pushing the legislation, which they hadn't done before, says Terry Madonna, director of the Center for Politics and Public Affairs at Franklin & Marshall College in Pennsylvania.

He said the biggest challenge to passing the legislation was the Pennsylvania House of Representatives, where the Republican party is divided between practical, moderate conservatives and those with a more ideological bent. "This kind of spending is essential," Madonna says. "There's a genuine relief this got done at all, given the nature of the House."

Madonna says polling his center has conducted indicates that voters are willing to accept the higher gasoline taxes that will start to take effect. He also doubts that lawmakers who supported the plan will face major repercussions when they seek re-election.

Pennsylvania now joins Maryland, Massachusetts, Vermont, Wyoming and Virginia among the group of states this year that took major steps to increase transportation revenue. Its plan most closely mirrors that of Virginia, which also addressed the wholesale tax on fuels.

The Pennsylvania plan is also similar to a recent proposal by Sen. Barbara Boxer (D-Calif.), head of the Senate Committee on Environment and Public Works, who has suggested eliminating the federal gas tax in favor of a wholesale tax.

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