A gas station sign in Cranberry, Pennsylvania.
Pennsylvania’s gas tax is a major funding source for the upkeep and repair of roads and bridges across the state.
It’s also one of the highest gas taxes across the nation.
An automatic increase of the tax, set to kick in 2023, is now causing a stir as Republicans lead an effort to reverse the change. Whether or not the tax increase is avoided, however, Pennsylvania will still have a problem at hand: how to fund its infrastructure needs as revenues from the gas tax fall.
Act 89 of 2013 got rid of the state’s flat gas tax in favor of an annually assessed rate tied to the average wholesale price of gas. As prices rise, then, the tax increases. If this year's increase takes effect, it could add an additional cost of 5 cents per gallon.
To prevent that tax bump, the Senate passed a bill Wednesday to stop the increase now and in the future.
“My measure immediately cuts the gas tax to temper inflation-induced gas prices and the costly ramifications to home heating and goods delivered to grocery stores and residences,” Sen. Wayne Langerholc Jr., R-Clearfield, and chairman of the Senate Transportation Committee, said in a statement.
Langerholc blamed outgoing Gov. Tom Wolf and President Joe Biden for “insurmountable transportation costs facing Pennsylvania drivers.”
“Our commonwealth has significant infrastructure needs that must be addressed as soon as possible, but increasing the gas tax only adds another serious financial burden on family budgets throughout the state,” said Sen. Scott Martin, R-Strasburg, and chairman of the Senate Appropriations Committee.
If the bill passes the House and the governor approves it, drivers will be spared a tax hike, but the question of funding road repairs linger.
More fuel-efficient vehicles and electric vehicles will also keep gas tax revenues flat and declining, and the unpopularity of tolls has given the General Assembly problems finding a viable funding alternative as The Center Square previously reported.
Issuing a bond has been proposed, as have road user fees, package fees, and other alternatives. In his legislative memo of the bill that passed Wednesday, Langerholc noted that he planned to push for a mileage-based user fee for electric vehicles to make up for the lost gas tax.
Even if the bill doesn’t become law, however, motorists might not notice the increase.
The Energy Information Administration expects the average price of gas to dramatically fall, from the $3.96 per gallon average of 2022 to a $3.32 per gallon in 2023 and $3.09 in 2024. Those price drops are driven by less demand for gas and more supply.
