Pennsylvania Governor Calls for New Gas Station Tax

The transportation plan would eliminate a statutory cap on the oil company franchise tax.

January 18, 2013

HARRISBURG - Pennsylvania Gov. Tom Corbett will reveal his transportation plan on Jan. 24, but the Associated Press reports the centerpiece of the proposal would effectively raise taxes for gasoline stations.

The governor ran on a platform of not raising taxes, and this is an end-run around that promise. The proposal would eliminate a statutory cap on the oil company franchise tax, which requires Legislature approval. That tax per gallon currently averages $1.25 of the wholesale price. Raising the cap would likely bring in $1.9 billion in annual revenue.

Senate Transportation Committee Chairman John Rafferty confirmed that administration officials had been working with lawmakers on a bill that would eliminate the tax cap. In November, Corbett first said he was looking into removing the cap, which had been the recommendation of a commission that studied how to increase transportation funding.

Down in Virginia, Gov. Bob McDonnell€™s transportation plan would eliminate the state€™s 17.5 cents per gallon gasoline tax in favor of increasing the state sales tax for funding. Meanwhile, Iowa lawmakers have raising the state gasoline tax on the table.

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