News

Pa. May Move on Drivers' Wallets

Tuesday, November 14, 2006

HARRISBURG, Pa. (AP) - November 14, 2006 -- Getting a driver's license, registering a vehicle, and filling the gas tank would all become more expensive for Pennsylvania motorists under a proposal released Monday to raise roughly $1.7 billion for improving the state's highways and bridges and funding its cash-strapped mass-transit systems.

A transportation study commission is calling for increasing the 19¢/gallon oil franchise tax by 11.5¢ per gallon and raising various motor vehicle registration and license fees to generate an additional $900 million for highway and bridge projects. The oil franchise tax is levied on the wholesale price of gasoline and passed on to consumers as part of the gasoline tax.

The report also calls for raising $65 million for bridges and highways owned by counties and municipalities through an additional 1¢ increase in the oil franchise tax.

Transportation Secretary Allen D. Biehler said at a news conference Monday that the commission appointed by Democratic Gov. Ed Rendell struggled with the task of setting a price tag for new transportation funding and determining how to pay for it.

"It is a tough, a very tough, issue for all of us, but I don't know of any other place to start, except (to) start from a point of well-founded pieces of information that would help people understand the circumstances," Biehler said.

The commission is also recommending a combination of state and local taxes to raise an additional $760 million for mass transit. The state would raise its $576 million share by raising the 1 percent realty-transfer tax by less than one percentage point; counties and municipalities would raise their shares by imposing local sales, earned-income or realty-transfer taxes.

The proposed oil franchise tax and motor-vehicle fee increases would cost $7 a month combined for the average driver, and the proposed realty-transfer tax increase would add about $5 a month to a 30-year, $150,000 mortgage for homeowners, Biehler said.

Additionally, the commission said spending on highways and mass transit could be reduced by $180 million through steps such as using public-private partnerships for highway construction and financing, streamlining the highway construction process, and restructuring mass-transit routes.

It was not immediately clear Monday whether Rendell or state lawmakers would endorse the report's recommendations. Rendell spokesman Chuck Ardo said the governor will review the report and try to respond to it quickly.

"The governor has to review both the commission's perspective on the problem, consider that, and then consider their recommended response," Ardo said. "We can't just focus on what the response is."

Senate Transportation Committee Chairman Roger A. Madigan applauded the commission's recommendations for cost savings in a memo to fellow senators and senators-elect. But he said lawmakers would have to deliberate carefully over the recommended tax and fee increases.

"We must fully explore how we can improve our transportation network without increasing revenues before we seek to increase the financial burden upon our citizens," said Madigan, R-Bradford. "A thoughtful debate should occur over the next six months to aid us in developing the best possible proposal to balance these issues with action in tandem with the adoption of the ... 2007-2008 budget."

Rendell established the commission in February 2005 after he and the Legislature could not agree on financial support for transit agencies facing cash shortages. At the same time, Rendell also rerouted some of Pennsylvania's federal highway funding to keep transit agencies afloat until 2007.

Without a public-funding increase, the state's two largest mass transit systems, the Southeastern Pennsylvania Transportation Authority and the Port Authority of Allegheny County, will have to address a combined $81 million deficit in the first six months of 2007.

Get more News »