Pennsylvania to phase out gas tax; commission to develop funding solutions

March 17, 2021

PennDOT says reliance on the gas tax for state revenue is becoming less and less dependable

Gov. Tom Wolf recently reiterated his commitment to phase out Pennsylvania's gas tax, which the Pennsylvania DOT (PennDOT) says is becoming an unreliable source for funding the state's vast transportation network.

To make this possible and to further address the state's transportation funding needs, the governor has also signed an Executive Order establishing the Transportation Revenue Options Commission, the goal of which is to develop comprehensive funding recommendations for Pennsylvania's large and aging infrastructure. 

"Our economy, our communities, and our future rely on a strong transportation system that supports our safety and growth. We have more than $9 billion in annual unmet needs across our state-maintained transportation system alone. At the same time, Pennsylvania is relying too much on outdated, unreliable funding methods, and the federal government hasn't taken meaningful action in decades," Gov. Wolf said in a statement.

Pennsylvania has one of the largest state-owned transportation networks in the country, with nearly 40,000 miles of roads and over 25,400 bridges under its direct purview. PennDOT also oversees aviation, rail freight, public transportation, ports, pedestrian and bicycle programs. 

In 2019, the Transportation Advisory Committee (TAC) identified major risks to transportation funding such as reduced fuel revenues, unpredictable federal funding, and legislative changes to reduce commitments.  

PennDOT's latest assessment places the annual gap of its needs in all modes and facilities at $9.3 billion, growing to an annual $14.5 billion gap by 2030. Further, PennDOT says as more fuel-efficient cars and technologies are created, reliance on the gas tax for state revenue is less and less dependable, and any phase out of the gas tax will need to be coupled with new or replacement revenue. 

The commission will have its first meeting by March 25 and a report of commission activities and funding options will be submitted to the Governor before Aug. 1, 2021. 

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SOURCE: Pennsylvania DOT

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