Billions In Tax, Fee Hikes Proposed For PA Transportation Needs

HARRISBURG, PA — A panel established to determine funding options for state road and bridge improvements is suggesting a variety of new taxes and tolls to generate as much as $11.5 billion annually.

The Transportation Revenue Options Commission submitted its final report Friday to Gov. Tom Wolf. The document contains what is labeled a "strategic funding proposal (that) aims to address the acute transportation funding challenge facing the commonwealth now and into the future."

"This proposal will position Pennsylvania to benefit from the long-term mobility and access necessary to support economic prosperity, public safety, and a high quality of life for individuals and communities across Pennsylvania," said PennDOT secretary and commission chair Yassmin Gramian. "The proposed investments will produce significant benefits across the state.

Wolf created the panel in March to tackle the funding issue after PennDOT's approximately $8 billion shortfall in its annual budget for highway and bridge construction and maintenance. The current budget of about $6.9 million per year is less than half of what the agency says it needs to properly perform those tasks.

The potential revenue sources to address the problem include:

• Road User Charges
  

These would include mileage-based user fees for gas and electric vehicles, which the commission said appears to be the best long-term funding solution for the state. The charges theoretically would provide enough revenue to eliminate the state's onerous gas tax, but two large obstacles exist: Federal approvals likely would be needed, and motorists could resist having their mileage tracked.

• Tolling
  

This could involve the tolling of interstates and expressways, as well tolls that could be charged to travel on highway limited-access lanes to provide quicker trips. The Pennsylvania Motor Truck Association and Pennsylvania Bus Association already have voiced concerns that this would disproportionately impact commercial vehicles and create diversion to lower-volume, toll-free routes.

• Fees

Various increased fees are proposed, including hikes in vehicle registration, rental, lease and rideshare fees. New fees could include an aircraft registration fee and a goods delivery fee on Amazon, FedEx, UPS, grocery stores, restaurants and other businesses that deliver to homes.

• Taxes

The commission suggests hiking the present vehicle sales tax and the jet fuel tax. A new vehicle tax could be introduced for passenger vehicles only based on the value of the vehicle. Also recommended is indexing the gas tax to inflation until the gas levy potentially is phased out.

• Redirect Existing Funding

The commission suggested eliminating transfers from the Motor License Fund to the Pennsylvania State Police and funding the state police via the general fund. The commission acknowledged that this move could "place further pressure on the general fund."

Here's how much revenue the commission estimates these moves could generate:

(Transportation Revenue Options Commission)

None of the increases will be immediate, as both the state Legislature and the governor have to approve them.

"Throughout this process, we have had thoughtful and productive discussions," Gramian said. "We are now presenting the governor and the General Assembly with a host of well-researched options for consideration."

The commission was composed of transportation, economic, and community stakeholders from the public and private sectors, including majority and minority leaders from the House and Senate transportation and appropriations committees.

See the full report here.

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