Pennsylvania governor’s funding plan includes 28-cent fuel tax increase Pennsylvania Gov. Tom Corbett on Tuesday, Feb. 5, announced his plan to pay for $1.9 billion each year in new funding for roads, bridges and transit throughout the state. It includes a nearly 30-cent-per-gallon fuel tax increase.

“Every year, nearly half-a-trillion dollars worth of goods and services move through our state transportation system,” Corbett said during prepared remarks. “Transportation is the bloodstream of our economy. If it fails, our economy fails.”

Nearly half of the new annual revenue would come via ending a cap on a tax on wholesale fuel prices.

The change was touted in 2011 by an advisory commission to the governor on transportation funding. The Transportation Funding Advisory Commission estimated a $3.5 billion annual shortfall in funds needed for roads, bridges and transit.

Lifting a cap on the oil company franchise tax would increase the per-gallon tax on fuel about 28 cents over five years. Currently, the tax applies only to the first $1.25 per gallon of the wholesale price.

Eliminating the cap on fuel prices now exceeding $3 per gallon would go a long way toward helping the state raise about $1.85 billion annually in five years.

The plan would also reduce the “flat tax” portion of the fuel tax by 17 percent over two years. The change is estimated to reduce the price at the pump by 2 cents per gallon.

Other changes include stretching out vehicle registrations to every two years instead of annually. Driver’s license renewals would also be changed to every six years – up from every four years. Also included is a plan to encourage more public private partnership opportunities.

State lawmakers will work on the governor’s initiative in the coming months and try to come up with a consensus for how to address the state’s transportation funding shortfall.

OOIDA encourages Pennsylvania truckers to be involved in the legislative process.