Wolf seeks to phase out gas tax, overhaul Pa. highway funding
Pennsylvania is finally going to take a comprehensive look at how to fund transportation programs, and Gov. Tom Wolf reiterated his commitment to phasing out the second-highest-in-the-country gasoline tax as the primary funding source.
The governor’s office announced Friday it is forming the Transportation Revenue Options Commission to find other ways to fund the state’s transportation programs. For several years, the state Department of Transportation and Pennsylvania Turnpike have
called for funding changes because the state currently generates only about $6.9 billion of the more than $15 billion a year it has in transportation needs.
The commission will be on a fast track to complete its work, with the governor instructing members to meet by March 25 and produce a final report by Aug. 1. Mr. Wolf named 42 members to the commission, including Allegheny County Executive Rich Fitzgerald and Port Authority CEO Katharine Eagan Kelleman as well as state House and Senate transportation and appropriations committee leaders, but he said more could be added before the first meeting.
PennDOT Secretary Yassmin
Gramian will chair the committee, which also includes union leaders, contractors, trade groups and economic development experts.
“We have more than $9 billion in annual unmet needs across our state-maintained transportation system alone,” the governor said in a news release. “At the same time, Pennsylvania is relying too much on outdated, unreliable funding methods, and the federal government hasn’t taken meaningful action in decades.
“Phasing out the burdensome gas tax, coupled with seeking long-term reliable funding solutions that will keep pace with our infrastructure needs, deserves a close examination. Forming this bipartisan commission will bring multiple, bipartisan voices to the table to ensure that we can examine reliable, sustainable revenue solutions to address both near-term and long-term funding needs.”
Mr. Fitzgerald, who also chairs the regional Southwestern Pennsylvania Commission, called new funding for transportation “critical” to maintain the region’s competitiveness. The short time frame for the committee’s report shows the importance of the issue, he said.
“I think the governor understands there’s a sense of urgency,” he said.
Mr. Fitzgerald said among the funding options would be an excise tax on natural gas, additional tolling, a sales tax or a tax based on vehicle miles driven. Some areas across the country use a combination of sources.
Ms. Kelleman, whose agency receives about 22% of its revenue from riders and the rest from state and federal subsidies, said through spokesman Adam Brandolph she was “quite honored” to be named to the committee.
“Very excited to be part of such a forward-thinking group and looking forward to finding a solution to replace the gas tax,” Ms. Kelleman said in a statement. She said any source of funding the committee settles on must be “dedicated, reliable and sustainable.”
Currently, the state relies on its 58.7-cents-a-gallon gasoline tax and the federal tax of 18.4 cents for about 74% of its transportation revenue. However, that tax has been producing flat or diminishing returns in recent years due to the increasing use of more fuel-efficient vehicles and electric vehicles.
Additionally, the Pennsylvania Turnpike has built up more than $13 billion in debt, much of it related to the Legislature requiring it to pay $ 400 million a year to PennDOT to help pay for public transit. That payment is set to expire in July 2022, but the state hasn’t identified another source for the funds.
Pennsylvania State Police also draw several hundred million from the state’s Motor License Fund to pay for traffic control on state highways. Officials would like that money to go for road maintenance, too, but again need to find another source.
And those issues existed before the COVID-19 pandemic. Less driving during the pandemic has reduced PennDOT’s revenue by an estimated $500 million, and the turnpike has lost an estimated $273 million through January.
PennDOT already has begun looking for other revenue sources. It formed a special office last fall to find alternative funding and announced last month it was beginning the process to charge tolls on nine bridges across the state, including the Interstate 79 bridge in Bridgeville, to fund their replacements.
Other possibilities include partnerships with contractors who would build expressway lanes on busy roads and charge a toll or charging a fee for motorists who drive during rush hours.