Earlier this month, the Senate Transportation Committee passed a massive $2.5 Billion transportation package. It has yet to be voted on by the full Senate. However, its contents should be of concern to all Pennsylvanians.
In addition to raising a host of fees for drivers, the legislation also includes a significant tax increase on wholesale gasoline via the "oil company franchise tax".
This is a relatively obscure tax that is paid directly by gas stations based on the wholesale price of gasoline. Right now the maximum wholesale price that the tax can be calculated from is $1.95 per gallon, a per-gallon price we’ve long since surpassed. By lifting the cap, the state will collect more in taxes based on the current wholesale price of gasoline.
Upon passage of the transportation package the Chairman of the Transportation Committee, Sen. Rafferty (R-Berks, Chester and Montgomery Counties) stated: "…the business community is solid behind this." Not surprisingly, this is not an entirely accurate statement. One segment of the business community who is not solidly behind the gas tax hike is independent gas station owners.
After our first post on the proposed gas tax hike, we were contacted by the folks at Liberty! Petroleum. Founded in 1988, Liberty owns and operates 24 travel plazas in Northeastern PA. They currently employ 370 people. So they certainly do not sound like "big oil" to us. When CAP inquired about what impact the proposed tax hike would have on them, we were told:
"Most of our locations are in the rural and economically challenged counties of Pennsylvania , where the average commute for our employees is over 25 miles. If the Transportation Bill is passed as outlined, it will severely affect our employee’s daily commute. In fact, in these communities, in spite of us being one of the larger employers, other employers are also at significant distance, so this affects everyone in our rural communities." (Emphasis added)
The folks at Liberty! were also kind enough to put together a tremendously helpful fact sheet on the gas tax proposal. It turns out that if the Rafferty/Corbett gas tax were to go into effect, Pennsylvania would have the highest gas tax rate in the nation. Pennsylvania commuters are "captive" customers. They have little choice but to pay the higher gasoline tax.
How many interstate truck drivers will stop at Pennsylvania stations knowing that fuel could cost them up to 42 cents a gallon more? How much revenue will the government lose as a result of the sizable difference in tax rates when folks just fill the tanks before crossing the border? And, how will that affect the employers (and their employees) who depend on that interstate traffic?
Sadly, the transportation package makes ZERO effort to address the cost side of the equation. Pennsylvania is in the top ten in terms of cost per mile for maintenance. Rather than trying to reduce costs and get more for the money the state already collects, too many elected officials are willing to squeeze more money from taxpayers.
Please contact your representative and senator. Feel free to share the fact sheet that Liberty! put together with them. Let them know you expect them to bring down costs before they even think about raising taxes.
Citizens Alliance of Pennsylvania (CAP) is a non-profit organization founded to raise the standard of living of all Pennsylvanians by restoring limited government, economic freedom, and personal responsibility. By empowering the Commonwealth’s employers and taxpayers to break state government’s "Iron Triangle" of career politicians, bureaucrats, and Big Government lobbyists, this restoration will occur and Pennsylvania will prosper.
Citizens Alliance of Pennsylvania | P.O. Box 6726 | Harrisburg | PA | 17112