Monday, May 24, 2010

A time to tax

I've broached quite a few touchy subjects on this blog over the past 11 months, but I suspect this entry will strike a nerve... It's time for the Pennsylvania state legislature to raise the gas tax by 10 cents. There, I said it. Now feel free to scroll down to the comment sections and start ranting.

But seriously, our roads are crumbling and bridges becoming impassable. The state legislature tried to correct the problem in 2007 with passage of Act 44 that would allow the state to either lease the Pennsylvania Turnpike or toll Interstate 80. Either plan would have raised about a billion dollars each year to fund transportation costs. But both plans were rejected. Now the state is facing a $500 million budget gap in road funding that will have to be made up elsewhere.

So rather than raising the rates for people using the Turnpike or I-80, let's spread the costs around to the entire motoring public. It's the fairest "user fee" that could ever be devised. And it wouldn't be as costly at the pump as you might think.

Think back 10 years ago when gas was $1.29 per gallon. The state gas tax was roughly 30 cents per gallon, which meant it was about a 23 percent tax on fuel. Flash forward to today when gasoline is hovering around $3.00, and that same tax percentage drops to just 10 percent. So while gasoline prices have more than doubled, the state (31.1 cpg) and federal (18.4 cpg) gas taxes have remained stagnant.

Why not implement a 15 percentage tax based on the wholesale price of gas? If the wholesale cost is $2.00, then the tax would be 30 cents and the price at he pump would be $2.30 before the federal tax is applied. If gas rices to $3.00, then the cost would be $3.45.

I'm not suggesting that the public would not be infuriated by an gas tax increase. But would it really be that burdensome to tie the tax to inflation rates or raise it a measly dime to ensure better roads and bridges? Now, I don't expect the state legislature to enact an increase because, after all, this is an election year. But I do think they should stop paying lip-service to the need for better roads while not having the political spine to find a solution to the problem.

UPDATE: Transportation experts agree that a gas tax increase is needed to fund road improvements. One expert estimates a 25-cent increase would provide $1.5 billion in additional revenue, so my measly dime suggestion would bring $600 million. Isn't that just about the same number we need to fill the budget gap? What say you, Harrisburg?


  1. I'll up the ante. I would be in favor of a $1-a-gallon increase in the gasoline tax, with half going to the state for infrastructure improvements and the other half going to the federal government for the sole purpose of developing and supporting the creation and use of viable cars that do not rely on fossil fuels. We need to quit burning oil and rocks to run our vehicles and homes.

  2. That's what Tom Friedman has been saying for years, although he called it a "Patriot Tax" ... things always sound better with patriot in front of it, right? But it definitely would be useful in that it would fund transportation, wean us off oil and stop us from sending more money to countries that hate us.