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PSN on July 22, 2010 - 1:11pm
HARRISBURG -- A gasoline tax increase of 3.25 cents per gallon could help the state collect some of the $472 million a year it needs for transportation projects, Gov. Ed Rendell said Monday.
That's part of his back-up plan if lawmakers won't agree to higher taxes for oil companies.
The revenue is needed to fund road improvements, bridge replacements and mass-transit projects, the governor said.
Pennsylvania needs to make up $472 million a year that the state had planned to collect from drivers on Interstate 80 before the federal government rejected the state's tolling application.
"There's no way we can do the things we need to do ... without raising some form of taxes and fees," Mr. Rendell said.
He prefers to raise the money by increasing taxes on oil profits while prohibiting companies from passing the cost on to consumers.
Senate Republicans are concerned that the plan -- which would tie price increases at the pump to those of other states -- conflicts with state and federal laws.
"It sounds terrific from a populist point of view, but there would be problems with violations of interstate commerce laws and the state's uniformity clause, which says taxes shall be equally applied," said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware. "It would run into so many problems so quickly. Lawsuits would be guaranteed."
Mr. Rendell's Plan B faces hurdles, too.
In addition to increasing the gas tax from 31.2 cents to 34.45 cents per gallon, it calls for higher payments for licensing and registration fees.
He acknowledged that tax and fee hikes are tenuous during election years but said money is sorely needed to fix deteriorating roads and bridges.
"We've got to act. This is a time for a little bit of political courage," he said. "I think voters would understand."
Options including increasing driver's licenses renewal fees from $21 to $23.10; increasing annual car registration from $36 to $45; increasing vehicle title fees from $22.50 to $28.13; increasing annual inspection sticker fees from $2 to $4.06 and increasing the cost of driving history reports from $5 to $11.20.
Those fee increases would raise about $265 million, the governor's office said. A 3.25-cent-per-gallon increase at the pump, meanwhile, would raise about $200 million.
Additional money could be raised, Mr. Rendell said, by increasing enforcement of the requirement to carry insurance. One option would be to install surveillance cameras at toll plazas and highway ramps. Photographs of license plates could be compared to insurance records, and uninsured drivers would be fined.
Some of the governor's ideas may have merit but right now there's no consensus for any of them, Mr. Arneson said.
Mr. Rendell said lawmakers need to address the transportation funding problem now, even though some would rather wait until a new governor is in office.
He is asking lawmakers to cut their summer vacations short to begin working on transportation funding on Aug. 23.