Corbett Administration Floats Transpo Funding Trial Balloon With Uncapped Wholesale Gas Tax

Share With Friends

I want to see the actual plan before praising Tom Corbett, but if what Angela Couloumbis and Amy Worden are reporting is true, I’ll be impressed:

The governor is scheduled to announce next week that he intends to uncap the so-called oil company franchise tax, according to two senior legislative staffers who are familiar with the proposal and spoke on condition of anonymity. That tax is levied on the wholesale price of gas and is now capped at $1.25 per gallon.

The administration estimates that uncapping it would eventually yield nearly $2 billion annually.

Administration officials could not be reached for comment Wednesday night. But the governor has publicly said several times in recent months that he was considering uncapping the tax, an idea also recommended by the task force he created to study transportation-funding options.

In its August 2011 report, that panel recommended a dozen ways to raise $2.5 billion needed to fix aging roads and bridges, as well as supporting mass transit.

Chief among the proposals – and by far the one that would raise the most money – was lifting the cap on the franchise tax. Panelists said it could raise $272 million in the first year and up to $1.3 billion by the fifth year.

This seems like a trial balloon to get a preview of how bad the backlash will be from various corners, so for what it’s worth let me register my approval of the idea.

The other Corbett transportation funding panel ideas weren’t bad or anything, but many were/are going to be highly visible and irritating to the people paying them. The wholesale gas tax, on the other hand, is largely invisible to payers at the pump. Some of the incidence of the wholesale gas tax is going to fall on gas stations and some of that’s going to get passed along to consumers, but we’re talking about a few cents per trip to the gas station. Gas prices fluctuate up and down by a few cents all the time. Nobody’s going to notice.

This entry was posted in Budget, Transportation.

Comments are closed.