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Corbett's increase in transportation revenue mostly paid by ending cap on wholesale gasoline tax

| Tuesday, Feb. 5, 2013, 11:59 p.m.

HARRISBURG — Gov. Tom Corbett says his long-awaited transportation plan would generate $5.3 billion over five years, but administration officials don't know how much would be passed on to motorists at the pump.

“Do you have a crystal ball?” PennDOT Transportation Secretary Barry Schoch asked.

Most of the money — $510 million in the first year and $1.8 billion by the fifth — would come from gradually eliminating the cap on a tax that gasoline wholesalers pay.

“This is not a new tax, nor am I proposing to increase the rate of the existing tax,” Corbett said during his annual budget address. “It is time for oil and gas companies to pay their fair share of the cost of the infrastructure supporting their industry.”

Wholesalers pay tax on the first $1.25 per gallon of the average wholesale price of gas, estimated this year at $3.11 per gallon by the state Department of Revenue. The tax generates 19.2 cents per gallon now. Corbett would tax the full wholesale price, generating 47.7 cents per gallon in the fifth year of the plan, based on current wholesale values.

The tax would jump to 28.7 cents per gallon on July 1 and 38.2 cents starting Jan. 1, 2015.

Corbett would trim the liquid fuels tax that consumers pay by 1 cent a gallon next fiscal year and another cent the following year, reducing it to 10 cents per gallon. That would reduce revenue by up to $120 million, Schoch said.

To cut administrative costs, the state would require motorists to register vehicles every two years instead of annually, and to renew driver's licenses every six years instead of four. Rates wouldn't change. The state would discontinue the stamp-sized registration stickers for license plates.

Corbett would stop requiring the Pennsylvania Turnpike to pay PennDOT $450 million annually, starting in 10 years. Since 2007, when Act 44 added the assessment, the turnpike's debt tripled, and it raised tolls each of the past five years.

Waiting 10 years “gives us time to work out replacement funding with the Legislature,” Schoch said.

Officials could not say how much money would go toward Western Pennsylvania projects or transit agencies such as Port Authority of Allegheny County.

Corbett would require mass transit agencies to study regional consolidation to cut costs or risk losing state money — an idea Allegheny County Executive Rich Fitzgerald said “makes all sense in the world.”

“It's not adequate,” said Sen. Matt Smith, D-Mt. Lebanon, adding a Corbett-appointed commission in August 2011 recommended ways to generate up to $2.7 billion a year through driver fees.

Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or tfontaine@tribweb.com.

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