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Getting Around: Despite millions more in revenue, PennDOT has same buying power it had 10 years ago

Sunday, October 19, 2003

By Joe Grata, Post-Gazette Staff Writer

In a news article last Sunday, I wrote that key Republican and Democratic lawmakers had agreed about the need to raise the "oil franchise tax," a form of the gas tax, by the equivalent of 5 cents to 8 cents a gallon.

The extra $315 million a year would be used to sustain reasonable levels of construction, maintenance and repair of roads and bridges, raise payments to municipalities and possibly finance more turnpike expansions.

After the state budget, education funding and gambling issues are settled -- if they're settled -- Gov. Ed Rendell is being looked upon to back the gas tax increase, provided it is tied to long-term funding for public transit.

In light of the proposal, advocated by the influential highway-building industry, I thought you would appreciate an update on PennDOT finances.

Pay attention. It's your money.

First, the department's total debt, which stood at $1.7 billion in 1993, has been paid down to $275.6 million. It took 3.5 cents of the gas tax to pay principal and interest a decade ago; now it takes 1 cent. (PennDOT bonds are to be paid off entirely in another 11 years.)

Because each penny of gas tax generates $63 million a year, you would think that PennDOT now has $157.5 million more a year in unobligated revenue to spend on other stuff than it did 10 years ago. Like fixing more falling bridges.

Not so, PennDOT's director of fiscal management, Dave Margolis, explained during my recent visit to Harrisburg. What appears to be extra money is going to the state police.

How so?

By law, PennDOT pays a two-thirds share of all state police costs, from salaries and vehicles to stations and training programs. During the 10 years that PennDOT's IOU payments dropped, state police costs grew by $156 million a year (to $372 million).

Follow the math.

The $157.5 million in lower debt payments minus $156 million for higher state police costs leaves PennDOT with an extra $1.5 million a year. The pittance won't pay for paving 10 miles of state-owned roads, let alone 40,500 miles in the system.

Margolis agreed.

"I need more answers," I said.

In the last 10 years, the total amount of gasoline and diesel fuel sold and taxed in Pennsylvania rose from 5.5 billion gallons to 6.5 billion gallons per year. With a flat tax of 12 cents a gallon and a wholesale oil franchise tax generating 14 cents a gallon, the state gas tax totals 26 cents a gallon.

Follow the math again.

One billion gallons in increased sales multiplied by $0.26 equals $260 million. Now, that's a lot more cash flowing into PennDOT's piggy bank.

In addition, I argued, the number of registered vehicles and licensed drivers has gone up. Plus, the Legislature raised gas, license and other fees by record amounts in 1997.

Exactly, Margolis acknowledged. In fact, he said, Motor License Fund revenues that determine spending on the state's highway-bridge program had gone up from $1.8 billion in 1993 to $2.6 billion a year.

An extra $800 million a year?

Holy Moly!

If that's the case, why would PennDOT and state lawmakers want to empty our pockets of more money at the gas pump?

If you factor in 3 percent a year for inflation in the construction industry and higher energy, health care and state police costs, "We have the same purchasing power" with $2.6 billion that PennDOT had with $1.8 billion in 1993, Margolis said.

So it appears PennDOT is no better off today than it was 10 years ago.

Go figure.

Just a thought. Instead of raising the gas tax to the highest level in the land, what about raising motor vehicle registration fees?

Here's the plan.

The $36 annual renewal fee would stay the same for owners of 55 models of small sedans, fuel-efficient cars, family sedans and other vehicles that achieve 23 miles a gallon or higher overall mileage as listed in the Consumer Reports 2003 Buying Guide.

Owners of 99 other models including luxury sedans, sport utility vehicles, minivans and large pickup trucks would have to pay an extra $10 a year for each mile per gallon below 23 miles their vehicles average.

That is, the owner of a Chevrolet Impala with V-6 engine getting 20 mpg would pay an extra $30, or $66 a year for a license. The owner of a Hummer or Ford Explorer SUV getting 10 mpg would pay an extra $130, or $166 total.

Because it is as much an energy-savings strategy as it is a revenue generator, maybe the extra money could be dedicated to those who save the most energy and account for fewer cars on highways -- public transit users.

I know many of you must be thinking: "Joe, keep your thoughts to yourself."

On the other hand. Jack Brannan of Upper St. Clair, a retired transportation consultant, does not hesitate to phone and scold me when I write about PennDOT funding without saying big trucks are responsible for 99 percent of the wear and tear to roads and bridges.

So I wasn't surprised to hear from him after last Sunday's story about the proposed gas tax increase, an increase that would fall mostly on you and me.

"Roads are designed and built for trucks, not cars," Brannan admonished me. "Just one 40-ton truck causes more wear and tear than 10,000 cars. Trucks need to pay their fair share. Pennsylvania is the major truck route to East Coast markets and we're being used."

I can't argue with the man.

Plate du jour. Jon Smith, of the city's Banksville area, spotted the Pennsylvania personalized license plate RAM TAX on a car on Greentree Road. Sounds like what the state wants to do with the GAS TAX.

Joe Grata can be reached at or 412-263-1985.

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