The Tribune Democrat, Johnstown, PA

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February 5, 2013

Corbett lays out plan for billions for transport

HARRISBURG — Gov. Tom Corbett on Tuesday proposed raising gasoline tax revenues to generate more than $5 billion over five years to build and repair roads, fix thousands of broken bridges and get mass transit systems onto sounder financial footing.

In the coming year alone, Corbett wants to spend the new money on an array of projects that include building additional lanes on existing highways, performing safety improvements and shoring up dangerous bridges. Highway maintenance funds would be spread through all 67 counties through a "needs-based formula."

In his budget address, Corbett called transportation "the bloodstream of our economy. If it fails, our economy fails."

State lawmakers who have been clamoring for increased spending on transportation infrastructure and the state's cash-strapped mass transit systems will comb over the proposal in the coming months.

After the speech, Senate Transportation Chairman John Rafferty, R-Montgomery, said the plan did not go far enough, and he expected to push for increased total spending, to a figure closer to $3 billion a year.

Most of the new money Corbett proposes would come from an increase in revenues from the oil company franchise tax, a wholesale levy at the gas station level. The governor wants to phase in the increase in three parts. The Pennsylvania Highway Information Association, a trade group, has said that the move would translate to about 28.5 cents per gallon at current prices.

Corbett described the additional taxes as coming from lifting a cap on the tax — addressing the politically sensitive issue of taxes for the first-term Republican, who ran on a platform of not raising taxes.

The tax is linked to the wholesale price of gas and is presently assessed only up to $1.25 per gallon. Corbett proposes eventually applying it to the full value.

"This is not a new tax, nor am I proposing to increase the rate of the existing tax," he said. "I am simply saying the time has come to apply it to the full value of what the company is selling. It is time for oil and gas companies to pay their fair share of the cost of infrastructure supporting their industry."

Sen. John Eichelberger, a Blair County Republican who is among those who have pledged not to raise taxes, said he was "concerned" about Corbett's plan and that his support will hinge on where the money gets spent.

"As I studied that (tax increase) issue over many, many votes, that's always a key to deciding whether it meets the pledge or not," Eichelberger said.

How the move would affect gas prices depends on how much of the increase gets passed along to consumers, and the price of gas at the time that the various increases are phased in. Under Corbett's proposal, consumers would not be immediately hit with a 28.5 cent increase in gasoline, partly because of the plan to phase it in.

"The truth really lies somewhere in between zero and that number," said Jason Wagner, managing director of the Pennsylvania Highway Information Association.

The governor also wants to lower the liquid fuels tax that is paid at the pump over two years by 2 cents a gallon, from 12 cents to 10 cents.

The two tax changes, plus alterations to vehicle registration and driver licensing, are projected to raise $5.4 billion over five years, from $500 million in the coming year to $1.8 billion in 2018-19.

House Minority Leader Frank Dermody, D-Allegheny, said that's not enough and that his members' support requires a more comprehensive solution to the state's transportation needs.

"What he's proposed here falls well short of a solution," Dermody said.

The Corbett administration said that if no action is taken, the gap between Pennsylvania's transportation needs and available funding will balloon to $7.2 billion a year by 2020, while the cost of materials will continue to grow, eating away at PennDOT's buying power.

Bob Latham, executive director of the Associated Pennsylvania Constructors, which represents road construction and engineering companies, welcomed the governor's initiative.

"I think the governor should be commended for coming up with a plan," Latham said. "It's a comprehensive plan, it encompasses all modes of transportation from what we understand, and it really addresses the pressing need for addressing safety and the long-term economic viability of the commonwealth."

Corbett would stretch out the cycle for renewal of vehicle registrations to every two years rather than annually, and driver's licenses to every six years, rather than every four years.

In 2013-14, the increased gas tax revenues would allow for increased spending of $300 million on state roads and bridges, $40 million on public transportation, $80 million on local roads and bridges, $30 million on Pennsylvania Turnpike expansion and $60 million on a multi-modal fund.

In five years, state roads and bridges would be getting $1.2 billion, public transportation $250 million and local roads and bridges $200 million.

 

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