Gov. Corbett's gasoline untax may raise $1.85 billion
January 22, 2013|Paul Carpenter
There are things that make California more attractive, in some ways, than Pennsylvania. There is Yosemite, of course, and it's nice to have either an In-N-Out or a sushi joint on just about every block in some areas, such as the San Fernando Valley.
It is great that Pennsylvania has more greenery, less smog and more horse-and-buggy communities, but we have no redwoods or sequoias
at all. Not everyone loves Death Valley as much as I do, but you cannot deny that it's interesting. And
everybody loves La Jolla.
In recent years, whenever I had a yen to move back to California, two things helped me get over it.
First, I could not live in a state that refuses to let adults decide for themselves whether they want to wear helmets on motorcycles. Second, California recently surpassed Hawaii when it comes to the price of gasoline. It's now up over $5 a gallon for regular in the Golden State.
According to news reports in recent days, Pennsylvania's governor may be ready to take steps to help us catch up to California regarding that second item.
Before we get to the details, we must stress that Gov. Tom Corbett is not — repeat NOT — contemplating a tax increase. That would break his political campaign promises. So please think of this as an untax.
Corbett is expected to announce details Thursday, but already it has been reported that a new untax would add an anticipated $1.85 billion in revenue to help the state upgrade its tattered roads and bridges.
The untax would be on wholesale gasoline prices. Currently, the Oil Company Franchise Tax is "capped," applying only to the first $1.25 in the price of a gallon of gasoline. The new plan would apply to the entire "average wholesale price," which is now at just over $3.11 a gallon. The plan is not a tax, mind you, because Corbett only wants to fiddle with a "cap." It is not a tax increase; it is just a cap increase.
"How is he raising taxes?" Kevin Harley, a spokesman for the governor, was quoted as saying after some pest (probably a reporter) asked about the plan. "I'm curious how he's raising taxes."
The Pennsylvania Highway Information Association reported that the untax would result in wholesalers paying about 28.5 cents per gallon in untax on top of the 19.2 cents per gallon they now pay in the Oil Company Franchise Tax. The Pittsburgh Post-Gazette, which broke the story on Friday, said the change will have an "uncertain impact on pump prices."
I, for one, am confidant that the big oil companies, out of the goodness of their hearts, will not pass along that extra 28.5 cents per gallon untax to people who buy gasoline at service stations. But if they do, it would mean Pennsylvania essentially had 60.8 cents in state taxes for each gallon.
At the moment, according to the American Petroleum Institute, California has 48.7 cents per gallon in state taxes at the retail level, more than 50 percent higher than Pennsylvania's current tax of 32.3 cents.
The Corbett untax plan would mean — if the oil companies do decide to pass along the hike to consumers — that Pennsylvania would be grabbing nearly 25 percent more than California.
We'd be paying a dime per gallon more in gasoline tax and untax than New York State, which now has the highest gasoline taxes. We could be number one!
When I checked my math with the state Department of Revenue, spokeswoman Elizabeth Brassell said that the way the Post-Gazette portrayed the proposed increase "is not the way we in the taxing community view the tax."
She said it is a levy "imposed on distributors. … How much of that [new] tax is passed on to the consumer is unknown."
As I said above, I'm confident the oil companies will not pass along any increases to consumers. If you are not as trusting, you're probably wondering what it might take to persuade Corbett to call off his crusade to move us closer to California's glorious $5 per gallon signs at the pump.
Keep in mind that he kept his promise not to tax the gas drilling robber barons. Pennsylvania is the only gas-drilling state in America that does not require drillers to pay a severance tax on their wells. That happened after the drilling companies gave Corbett more than $1 million in so-called "political campaign contributions."
So if you are fretting over an anticipated jump in the price of gasoline, you have only yourself to blame. Where were you with
your million-dollar contribution, chump?
By the way, the justification for Corbett's new gasoline untax is perfectly valid. It will help pay for highway repairs.
Personally, if $5 a gallon gasoline helps keep bridges from collapsing from under my car, or motorcycle, I'd just as soon pay it.
The only reservation some of us have is that virtually all damage to roadways and bridges is caused by heavy trucks. Studies have shown that one large truck causes 9,600 times as much damage as one car.
If truckers were required to pay their fair share — even if we go by the current 32.3 cents per gallon state levy on gasoline you pay at the pump for your car — the tax on each gallon of truck fuel should be more than $3,000 a gallon, based on the amount of damage they do.
Personally, I'd be satisfied if they were required to pay only a tenth of that.
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