Temporary halt in fuel taxes proposed
Would tap unspent federal COVID relief funds to cover lost state revenue
State Sen. Lisa Boscola proposal would cover for lost state revenue by tapping into unspent federal COVID relief funds, and let PennDOT borrow more money to cover road projects.
New proposals from state Sen. Lisa Boscola to temporarily get rid of Pennsylvania’s ultra-high gasoline and diesel fuel taxes would keep about $460 million in consumers’ pockets over a two-month stretch, the Northampton County Democrat said.
Pennsylvania’s diesel tax of more than 74 cents is the highest in the nation. The gasoline tax of more than 57 cents per gallon, coupled with federal taxes, creates the third-highest tax burden on gasoline-using motorists in the nation.
Both gas and diesel
prices have hit record highs repeatedly this year.
On Monday, AAA listed the average price of gasoline at $4.96 a gallon, up $1.77 from a year earlier, and diesel was at $6.15 a gallon, up $2.59 from a year ago.
Boscola said she wants to help priceshocked consumers immediately. Her proposal would cover for lost state revenue by tapping into unspent federal COVID relief funds, and let PennDOT borrow more money to cover road projects.
“Why can’t we give it back to the people?” she said of the federal money, which came to the state through the 2021 American Rescue Plan Act.
Boscola’s proposals are among many similar ones made in Harrisburg this year.
But the economic landscape continues to change dramatically for consumers, with the
latest federal inflation figure of 8.6% the highest in 41 years. There are many predictions of a recession.
And in Harrisburg, top lawmakers and the Wolf administration are in closed-door budget negotiations that almost certainly include the fate of about $2 billion of unspent ARPA money in state coffers.
Questions about gas and diesel tax relief for consumers, Boscola said, should be in the thick of negotiations.
Lehigh County Republican Sen. Pat Browne, a participant in those talks, said of the Boscola proposals, “Like all Senate members’ proposals at this point, we will give it due consideration as part of the overall ‘22-23 Commonwealth budget plan.”
Pushback and support
Boscola’s proposals, like all that propose reducing fuel taxes, face
pushback and skepticism in Harrisburg.
A top AAA official as well as former Pennsylvania Chamber of Business and Industry CEO Gene Barr have questioned their wisdom. Top lawmakers in the Republican majorities in the Senate and House stress the need to conserve money to prepare for an expected downturn in state revenue.
Republican House Majority Leader Kerry Benninghoff of Centre County said the nation was on a cliff headed for recession.
Referring to inflation, he criticized proposals for ”giving away free money to try and buoy up a problem that was caused by giving away free money.”
Republican Senate President Pro Tempore Jake Corman of Centre County issued his own gas tax-cut proposal earlier this year. Spokesman Jason Thompson said Corman still believes his is the best plan but is evaluating all that have been put on the table.
An oft-heard criticism of the gas tax-cut concept is that after the cut occurs, retailers or corporations will nullify at least part of it by raising the price on fuel itself.
“I believe the way that it is structured opens the door for corporations to rip consumers off,” said Lehigh County Democratic Rep. Mike Schlossberg. “Gas tax holidays are one of those things that sound really good, but there seems to be nothing to stop people from getting ripped off.”
Schlossberg said he preferred the approach of Attorney General Josh Shapiro — the Democratic nominee for governor — who in March proposed using federal pandemic aid to send $250 to each car-owning household in the state.
Nonetheless, Boscola’s proposals are likely to get attention in Harrisburg in part due to her history of bucking partisan trends and her profile on substantive issues.
In 2019, she was prime sponsor of the bill that became Act 77, the sweeping election-reform law that vastly expanded mail-in voting, and she sat next to Gov. Tom Wolf when he signed the bill into law. A few weeks ago, she was the only Senate Democrat to vote for a Republican-backed bill designed to prevent athletes who were male at birth from participating in women’s and girls’ school sports.
Earlier this year, she backed Corman’s proposal, and she said her own new proposal drew on his for ideas.
Senate Democrats spoke in favor of temporary gas tax cuts at a recent news conference.
“We know there is concern about a loss of revenue while the pause is in place, but Pennsylvania has billions in surplus funds that can be used to maintain roads and bridges during the gas tax holiday,” said Senate Democratic Leader Jay Costa of Allegheny County.
Nicole Reigelman, spokesperson for top House Democrat Joanna McClinton of Philadelphia, said Boscola’s proposal was being reviewed.
“Over the summer, our caucus is supportive of providing direct relief to our neighbors while also addressing the root cause of skyrocketing gas prices, which is corporate greed,” Reigelman said.
Beth Rementer, a spokesperson for Wolf, said the governor has long called for a phase out of the state gas tax and enacting a federal gas tax holiday.
Rementer said the administration will review tax-cut proposals but the Republican majority controls the legislative agenda and there has been no movement on this issue.