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With Rising Gasoline Prices, Tax Hike Could Be a Tough Sell

Wed March 10, 2004 - Northeast Edition
CEG



HARRISBURG, PA (AP) If the rumblings about a gas-tax hike that have emanated recently from the State Capitol ever turn into anything concrete, it may prove to be a tough sell to consumers already shell-shocked over the prices they are currently paying at the pump.

Pennsylvania motorists are paying approximately $1.65 a gallon for regular gas, according to the AAA, a figure that closely tracks a national study reflecting a run-up of about 10 percent in gasoline prices since late December.

That is very bad timing for the coalition of road-construction businesses, farm groups and labor unions that three months ago began pushing for a gas-tax increase of as much as 8 cents per gallon.

They argue that poor-quality roads pinch off economic vitality, contribute to the human and monetary cost of automobile accidents and leave commuters spending unproductive hours in bumper-to-bumper traffic.

“It’s a congestion-relief issue in the southeast. It’s an economic development issue in other parts of the state,” said Bob Latham, vice president of Associated Pennsylvania Constructors, a highway-construction industry association of approximately 450 businesses.

So far the idea seems to lack momentum. It has become a political hot potato being passed back and forth in an election year between the Republican-controlled Legislature and Democratic Gov. Ed Rendell. Neither side wants to appear to be taking the first step.

Rendell’s office said he would “consider” a tax increase if the General Assembly brings it to him, but spokesmen for the House and Senate GOP leadership say nothing like that is in the works.

Former Gov. Tom Ridge “increased the gas tax about five, six years ago. And they’ve been working around the clock, around the state, on almost every single road, it seems. I’m not certain what is the need for it,” said Steve Miskin, spokesman for the House Republican leadership.

The state’s gas tax went up 3.5 cents per gallon in 1997, along with a 50-percent rise in vehicle registration fees. The new money enabled the Pennsylvania Department of Transportation (PennDOT) to cover the growth in its maintenance budget while simultaneously pouring billions of dollars into new construction.

The 26-cent-a-gallon gas tax — every penny translates into $63 million a year — has been leveraged with federal matching funds. As a result, PennDOT’s construction spending has grown from $860 million in 1996 to $1.3 billion last year.

“That’s meant a huge amount of progress happening in Pennsylvania,” said PennDOT spokesman Rich Kirkpatrick. “A lot of things that were lying around for decades were done.”

The results are scattered throughout Pennsylvania — bypasses around Tunkhannock and Kittanning, the Route 222 project in Reading, a widening of Route 30 through York and Lancaster, improvements to U.S. 15 through the state’s midsection and the Route 33 extension bridge in Northampton County.

Despite all that progress, the state’s roadwork needs have hardly been satisfied. That means either Rendell or legislative Republicans may eventually decide to end the stalemate and take the wheel.

Two factors weigh against any initiative in the short term. One is the cost of gas — when Ridge’s tax hike passed, the price was $1.30 a gallon and falling, so consumers did not feel much pain. The other is uncertainty surrounding the six-year federal transportation-funding bill, currently in limbo in Congress and possibly on hold until after the November presidential election.

Craig Shuey, executive director of the Pennsylvania Senate Transportation Committee, said there are worrisome signs that when it does go through, Pennsylvania’s current return of nearly $1.20 for each dollar in federal highway taxes it sends to Washington will be slashed to 97 cents.

“What that would do to our infrastructure,” Shuey said, “would be devastating.”

It also may alter the political landscape in terms of a gas-tax increase.