Most local lawmakers voted for final transportation bill
The majority of the area’s local legislators voted for the final transportation bill that became law Monday, saying the dire need of Pennsylvania’s bridges and roads outweighs anything else.
Those opposing argued the $2.3 billion the legislation raises over five years could’ve been raised by taxing the natural gas industry more and the public less.
The legislation will raise revenue through uncapping the Oil Co. Franchise Tax, increased vehicle and driver fees, and more. It also eliminates the 12-cent tax on gas at the pump. The first tax increase on the sale of fuel to gas station owners (based on volume, not the price), will go into effect Jan. 1; it will be up to the franchises as to how much of that increase to pass on to the consumer.
State Sen. E. Eugene Yaw, R-Loyalsock Township, voted for the bill, saying $650 million will go to his district. Both the immediate and long-range impacts are significant, he said. More construction jobs will be created as more roads and bridges are fixed.
For the long-term, the legislation “is like a key that opens up the whole northcentral Pennsylvania region,” Yaw said regarding the Central Susquehanna Valley Thruway Project.
The law increases funding from $5 million to $35 million for the Dirt and Gravel Road Program, which is greatly used in Bradford and Susquehanna counties, Yaw said.
He noted the final version had some changes he was concerned about, such as a $1 increase for vehicle registration as opposed to a $16 increase.
While state Rep. Michael K. Hanna Sr., D-Lock Haven, voted against the bill twice during negotiations, once the Senate sent over its final bill, he voted for it.
“As long as it was an amendment, and I knew we weren’t killing the process, I felt I could vote against it and push for our agenda,” Hanna said. “Once that was over, and it was in the Senate bill, we knew it was un-amendable, and I voted in favor of it.”
He was hoping the prevailing wage provisions, pushing the threshold from $25,000 to $100,000, would be eliminated, and wanted to add a natural gas drilling severance tax, and his amendment addressed those issues.
While the final package did not include those things, he still voted for it.
“Obviously, we can’t wait for a bridge to fall down,” he said. It also created about 50,000 jobs, “so it’s a tremendous economic stimulus bill,” he said.
However, Hanna contended there is a better way to raise the funds, such as the severance tax. Currently, the state’s impact fee amounts to about a 2 percent tax on natural gas, and he proposed that an additional 5 percent severance tax. This could’ve lessened the gas tax, he said.
He said at least one natural gas CEO was on board with it, but “we couldn’t get the governor and Republicans to agree.”
State Sen. Joseph B. Scarnati III, R-Brockway, and state Rep. Garth Everett, R-Muncy, also voted for the bill.
Everett previously said a tough vote was necessary due to the state’s failing infrastructure system.
Scarnati said the bill is important for the state’s future and public safety.
On the opposing side, state Rep. Rick Mirabito, D-Williamsport, said he voted against it “the whole way through,” citing the process and the substance.
The process was too rushed and forced a fast up or down vote, and could’ve been done right in early 2014, he said.
For substance, Mirabito said the legislation “fundamentally changed the way we fund transportation.”
“By taking off the cap on the (Oil Co. Franchise Tax), the tax can increase forever,” he said. He said elected officials should have to make their case to the public, rather than rely on a perpetual tax.
Prior to the bill’s passage, there was a 12-cent flat tax per gallon of gasoline, and a percentage tax. This legislation raises the floor and takes the cap off the top, he said.
“By taking the cap off the top, you get an unlimited stream of income that increases more and more as the wholesale price of gas and oil goes up,” Mirabito said.
This is a larger problem for those on fixed incomes who have a harder time paying the eventual 28 cents per gallon, he said.
He also supports a severance tax on natural gas drilling. He said the severance tax is a volume tax like the wholesale fuel tax increase in the legislation, and called this “ironic.”
“So it’s OK to do it to the widow or widower who’s trying to survive on a pension or Social Security, but to the gas companies, we can’t do that. It’s wrong, and quite frankly, the public’s upset about it,” Mirabito said.
State Rep. Matthew E. Baker, R-Wellsboro, also voted against the bill because of the tax and fee increases.
He said the Oil Co. Franchise Tax is currently about 9 percent of the price of a gallon of gas, and calculated on a maximum price of $1.25 per gallon yields about 20.3 cents.
“By gradually lifting that cap over time to reflect actual gas prices already more than double the cap means the amount of the tax paid by the consumer will more than double,” Baker said. “With the cap on the (tax) fully lifted, Pennsylvania will become home to the most highly taxed gasoline in the nation, with a total of 75.2 cents of taxes on each gallon of gasoline.”
However, Yaw contended that comparing Pennsylvania to other states’ gas tax is like comparing “apples to rocks, not even apples to oranges” as the funding stream is so different.
According to the state Department of Transportation, Pennsylvania, fuel taxes are used only for highway and bridge-related purposes, and state police patrol functions, and amount to a “users’ fee.”
Once the taxes and fees are phased in over five years, the average driver would pay about $2.50 more a week, according to PennDOT.