Tags: gas | tax | transportation

Pa., NJ Under Pressure to Increase Gas Tax

Wednesday, 05 Dec 2012 12:55 PM

By Sandy Fitzgerald

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The governors of Pennsylvania and New Jersey are coming under pressure to increase state gasoline taxes to meet the need for more transportation funding.
 
Pennsylvania Republican Gov. Tom Corbett said last week he’s considering a hike in one component of the gas tax, reports the Philadelphia Inquirer.
 
Across the border in New Jersey, transit advocates are pushing GOP Gov. Chris Christie to raise the state gas tax as well, despite his vow not to, to pay for repairs to the state’s transit network, which was devastated by Hurricane Sandy.
 
Pennsylvania Republican Rep. Bill Shuster, the new chairman of the U.S. House Transportation Committee, is also putting on the pressure on states to explore all funding options to help meet their transportation needs.
 
The federal gas tax, which stands at 18.4 cents a gallon, hasn't been raised in 20 years, and many states have avoided their own increases for longer than that even as transportation infrastructure costs associated with road repair and building have skyrocketed.
 
Adding to the problem, the highways are now crowded with more efficient cars, and as Americans have changed their driving habits the tax revenues from the pumps have been steadily dropping.
 
The gas tax in Pennsylvania, which saw its last increase in 1997, stands at 31.2 cents. In New Jersey, it's much lower at 14.5 cents, but it hasn't been raised since 1988.
 
For his part, Corbett is considering a proposal recommended by his own advisory commission that would increase the gas tax by 22 cents a gallon removing a cap on the oil company franchise tax, which is capped at $1.25 a gallon. Removing the cap could produce an additional $1.4 billion a year. This would raise motorists’ gas prices by 22 cents a gallon, phased in over five years.
 
New Jersey transit advocates would like to see at least a 10 cent increase per gallon.

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