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Pa. chamber backs higher taxes on gas stations to fund road, bridge repairs

| Wednesday, March 13, 2013, 9:06 p.m.

Gov. Tom Corbett's idea to raise money for road and bridge maintenance through a higher tax on gas stations is a good idea — as long it doesn't increase costs on businesses too much, according to an advocacy group.

“We're in favor of reasonable increases,” said Samuel Denisco, vice president for government affairs with the Pennsylvania Chamber of Business and Industry during a visit to Pittsburgh on Wednesday.

The state needs to address its deteriorating transportation infrastructure, and it's the top issue for the chamber's more than 5,000 members, Denisco said. Another big issue is Corbett's plan to privatize the state's liquor system.

Corbett introduced his plan to generate money for transportation last month. It would involve eliminating a cap on the oil company franchise tax and raising it by 28.5 cents over five years. That would generate $1.8 billion in the fifth year but would require approval from the Legislature. It would be the first increase in the tax since 1998.

Critics say the tax increase would be passed along to drivers at the pump, but “no one can tell you how much more (consumers) will pay,” said Shawn Good, the chamber's director of government affairs. That's because the price of oil represents 70 percent of the price of gasoline, and oil companies such as Exxon, BP and Chevron don't always pass on all costs, he said.

“We're for a robust transportation system in Pennsylvania because it's important for our members,” Denisco said.

The Pennsylvania Highway Information Association, which represents road construction companies, trucking companies, AAA and others, said the current tax amounts to 19.2 cents per gallon. Eliminating the cap could raise that to 47.7 cents per gallon if the oil companies pass the entire increase on to consumers.

Lawmakers have pressured Corbett for a transportation bill to address road and bridge repairs. The state has identified 4,774 structurally deficient bridges, the most in the country.

The state's message is: “We need more money, and we need it sooner,“ which could run counter to the interests of businesses statewide, Denisco said.

Corbett's plan to get the state out of the liquor business will not survive as proposed, Denisco said.

The House Liquor Committee will vote on privatization on March 18 and changes in Corbett's plan are expected, he said.

The chamber supports Corbett's proposal because it would give its members, such as retailers, grocery stores and distributors, new opportunities. “We would like the free market to be able to participate.”

Corbett said on Friday that he would not rule out alternative plans to privatize the state liquor system, boosting the prospects for passage.

Denisco said an alternative favored by some legislators would be for the state to retain some control over the wholesale portion of the liquor business. “The state's distribution system is a very profitable portion of the system,” he said.

Corbett has proposed selling the state's 619 liquor stores. He would allow beer and wine to be sold by 1,200 retailers in grocery markets, pharmacies and box stores. Beer distributors could purchase “enhanced licenses” to sell liquor and wine and beer by the six-pack, rather than only by the case.

The state liquor stores would not be profitable operating independently, Denisco said.

House Majority Leader Mike Turzai, who introduced Corbett's proposal in the Legislature, has said he thinks selling liquor in the private market eventually would put state stores out of business.

“The consumer wants and our members want more choice. We hope the proposal that gets to the governor's desk provides for that,” Denisco said.

John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or joravecz@tribweb.com.

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