Pennsylvania Okays Biggest Tax Hike in More Than Two Decades

The Pennsylvania House of Representatives Thursday passed a transportation funding package that will cost residents a cumulative $7.5 billion over the next five years, primarily in gasoline and diesel fuel tax increases and a wide variety of fee increases for motorists.

The package has been pushed by Republican Gov. Tom Corbett, now seeking reelection, who promised in his 2010 campaign he would not raise taxes or fees. The measure passed the House 113-85 and was identical to a measure the House defeated twice on Monday night.

The last tax increase of this magnitude was a $3 billion hike in business taxes engineered by the late Gov. Robert P. Casey, Sr., a Democrat, in 1991. That tax hike was in a single hit and remains today.

The package passed Thursday will be drawn out over five years until it reaches its maximum annual funding goal of $2.5 billion. The Pennsylvania Department of Transportation (PennDOT) is funded at $6.8 billion in the current fiscal year.

Gasoline and diesel fuel taxes will increase gradually to an additional 28 cents and 39 cents per gallon, respectively. Those are conservative estimates since no one can predict oil prices.

Additionally, drivers will see a variety of fees from registrations and licenses to learner permits increase and then be raised every two years, based on inflation. By 2018, the state gasoline tax is expected to be over 59 cents per gallon. California currently has the highest gasoline tax at 53.2 cents per gallon.

Traffic fines will also increase by $100 for major moving violations, while the cost of failing to stop at a stop sign will jump from $25 to $100.

State Rep. Daryl Metcalfe (R-Butler) and other conservatives tried to make a a last ditch stand to stop what Metcalfe called the “Corbett Gasoline Tax,” but the die was cast due to intense lobbying by the governor, unions, and business interests, primarily those in construction and engineering businesses.

“Everybody wants good roads and bridges, but nobody wants to pay for them,” said state Rep. Michael McGeehan (D-Philadelphia), a proponent of the package. He did not reference the current PennDOT funding, nor how it is spent.

Metcalfe said the 127-page bill also contains increases in vehicle title fees ($22.50 to $50 each), vanity plates ($20-$76) and cumulative registration fee increases, rising from $54 to $77 per vehicle. The bill also allows the state’s 67 counties to levy $5 fees annually on each vehicle registered in the respective counties.

State Rep. John McGinnis (R-Blair), who holds a doctorate in financial economics, said the effects of the multi-billion package will be “negative, prolonged and severe.” He compared the House to “Lords over the taxpaying serfs.”

Once the full funding level is reached, mass transit will be funded at an additional $487 million annually. As much as 90 percent of that will go to the Allegheny County Port Authority (Pittsburgh region) and the Southeastern Pennsylvania Transportation Authority (SEPTA). The remainder will be divided among 35 other county transit agencies.

State taxpayers already subsidize more than 50 percent of the Port Authority operation and 60 percent of the SEPTA operation. Both agencies have threatened severe services cutbacks unless they receive more taxpayer dollars to subsidize their already heavily subsidized fares.

Minutes after the bill’s passage, Corbett’s office issued a press statement thanking “each lawmaker whose ‘yes’ vote will keep Pennsylvania moving.” Ninety minutes later the Corbett for Governor campaign issued a release, saying, “Unlike the gridlock in Washington, D.C., Pennsylvania is getting results and moving forward, thanks to the leadership of Governor Tom Corbett.

In October, polls showed Corbett with notoriously low “reelect” numbers of about 20 percent. That was before he broke his no tax increase, no fee increase pledge.