Fee per mile might replace gas tax
Transportation funding draft includes raising other fees, creating new ones
A state commission’s recipe for revamping transportation funding includes eliminating the gasoline tax while increasing vehicle registration and rental fees and adding new ones like taxes for package delivery, miles driven, and Uber and Lyft rides.
The 42-member Transportation Revenue Options Commission reviewed the proposed changes Wednesday that will be included in a draft of a report, the final version of which will go to Gov. Tom Wolf by the end of the month.
Wolf appointed the commission in March to find alternatives to the gasoline tax, which has been relatively flat for several years due to more efficient vehicles and the growth of electric vehicles — to close an $8.1 billion annual gap cited by PennDOT for road and bridge work.
The proposal calls for changes in three phases: the first two years, the next two years and five years or longer, with the new or increased charges starting at various times because some would require legislative approval. The new revenue sources are projected to generate $3.5 billion annually in the first phase, $6.6 billion in the second phase and $11.5 billion in the third.
The largest new revenue source and the most dramatic change would be establishing a tax of 8.1 cents a mile for each mile a vehicle is driven. That move — which wouldn’t begin until the third phase and would require legislative approval and a pilot period to test a collection method — is projected to generate $8.9 billion a year.
A fee of $1 for every package delivered by major companies like Amazon, FedEx and UPS, as well as local groceries and restaurants, could generate $785 million in the first phase and grow to $844.2 million by the third phase.
Transportation networks such as Uber and Lyft would be charged fees of $1.11 for each trip beginning in the second phase of the proposal. The commission estimates that would generate $210.2 million a year in that phase and grow to $218.7 million a year in the third phase.
For electric vehicles, the commission would create a miles-driven fee that would generate $4.65 million a year in the first phase and grow to $5.24 million by the third phase as use grows. And a new tax would add 2% to the cost of vehicle purchases.
Among existing taxes and fees, the vehicle rental fee would increase by $3 to $5; vehicle registration would double to $76 for passenger vehicles initially, then be replaced by a fee based on the value of the vehicle; and aircraft registration and jet fuel taxes would increase.
One potential use for the package and rental fees would be to fund the care of roads and bridges owned and maintained by local governments. Local counties also could have the opportunity to establish their own income tax to fund transportation needs.
The commission supports bridge tolling, but the report will not mention it because money from that proposed program would be earmarked for a specific bridge and the area around it. Fees also could be established to charge drivers extra for driving during rush hours or to use special lanes with reduced traffic.
As she opened Wednesday’s meeting, PennDOT Secretary and commission chair Yassmin Gramian told members they were down to “crunch time” to finish the report.
“We no longer have the time to do nothing,” she said. “Let (the recommendations) be bold.”
Gramian praised members for heeding their charge to have a mix of fees and taxes that would be paid by users of transportation facilities without burdening any one facet or group and encouraged them to follow through in the next two weeks. The commission pointed out that it had rejected calls for using funds from increasing corporate or real estate taxes, gambling or the possible legalization of recreational marijuana to pay for transportation work.
In addition to the lack of increasing revenue from the gasoline tax, the state is faced with replacing a $400 million annual payment from the Pennsylvania Turnpike to help pay for public transit. That payment remained after former Gov. Ed Rendell’s unsuccessful attempt in 2008 to toll I-80, but it is scheduled to expire in July 2022.