State tax on gasoline wholesalers to rise Thursday

Will gasoline prices in Pennsylvania make a U-turn to start the new year?

The state's tax on gasoline wholesalers will go up by 9.8 cents per gallon Thursday, as mandated by Act 89, the transportation funding law the legislature and Gov. Corbett enacted last year. Three days after that, a 5 percent toll increase will take effect on the Pennsylvania Turnpike.

How much of the gas-tax increase will be reflected in pump prices is difficult to discern, but if dealers pass along the entire amount, it would cost a motorist who drives 12,000 miles in a 24-miles-per-gallon vehicle an extra $49.

"Since the tax is imposed at the wholesale level, there is no way to predict what will be passed to consumers," said Erin Waters-Trasatt, spokeswoman for the Pennsylvania Department of Transportation. "Although there is one tax on gasoline statewide, prices vary widely, even within the same regions, because those in the business are working within the competitive marketplace."

The first increase in the tax, 9.5 cents per gallon, took effect Jan. 1 and seemed to drive pump prices up by several cents, but the higher cost was more than erased as gasoline prices tumbled from a statewide average of about $3.50 in January to $2.59 Monday.

"Fuel prices have moderated, so people are paying less than they did last year, but at the same time, we have a steady revenue stream that is paying huge dividends for Pennsylvanians," Waters-Trasatt said. Act 89 "is giving Pennsylvania the resources to tackle large backlogs of road and bridge repairs, a goal that most drivers share. They want their pavements smooth and their bridges in a state of good repair."

She said the funding increase enabled PennDot to start or bid more than 80 bridge projects and improve more than 1,600 miles of pavement this year.

The Thursday increase will push the state's tax to 51.6 cents per gallon, one of the nation's highest. The tax will not change again until 2017, when an increase of at least eight cents per gallon is due.

Turnpike tolls will go up by 5 percent for all drivers at 12:01 a.m. Sunday, the seventh consecutive year with an increase.

The increase applies to cash and E-ZPass users, the first time in five years that the turnpike has not imposed a larger percentage increase on cash users. Because cash tolls already are about 40 percent more than E-ZPass tolls, the increase will hit cash customers harder.

A westbound trip across the 359-mile main turnpike will increase by $1.90, to $39.90, for cash users and by $1.36, to $28.60, for customers who use the E-ZPass electronic collection system. Going eastbound, tolls would increase by $2.20, to $46.10, for those paying in cash, and $1.57, to $32.95, for E-ZPass. About three-quarters of the turnpike's drivers use E-ZPass.

Tolls have increased every year since January 2009. In its first 69 years of operation, the turnpike raised tolls five times.

A law the legislature enacted in 2007 and modified last year requires the turnpike to pay $450 million per year to PennDot. The amount is equal to more than half the turnpike's total operating revenue, which totaled $831.6 million last year.

The total that the turnpike has paid to PennDot so far is about $4.5 billion, with the money going for projects on non-turnpike highways and bridges, and to mass transit.

The $450 million annual payments were to continue until 2057, but Act 89 reduces the payments to $50 million a year after June 2022. The legislation also changed the allocation formula, designating all of the money for transit and multimodal projects. Turnpike officials have said annual toll increases will remain necessary to continue the payments to PennDot.

Another factor pushing up tolls is the need for extensive reconstruction on turnpike sections that are more than 70 years old, officials have said.

The toll increases appear not to have discouraged drivers from using the turnpike. About 187.9 million vehicles used it last year, down slightly from the 189.6 million vehicles recorded in 2008 before the toll increases.