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Gov. Wolf supportive of proposed federal gas tax suspension, hesitant on state tax holiday

To blunt the pain at the pump, state lawmakers are proposing temporary state and federal gas tax holidays.

HARRISBURG, Pa. — Another day, another broken record for gas prices. 

The Pennsylvania average now sits at $4.44 per gallon, according to AAA.

To blunt the pain at the pump, state lawmakers are proposing temporary state and federal gas tax holidays. Officials disagree, however, on where taxes should be cut and how to make up for lost revenue.

Senate President Pro Tempore Jake Corman (R-Centre) on March 9 proposed legislation that would lower the state gas tax by one third, or about 20 cents per gallon, through the end of 2022.

In 2021, Pennsylvania collected $1.4 billion in gas and diesel taxes, as well as other license, fine fee revenues, according to the state Revenue Department.

Not collecting a third of that revenue would create a significant deficit. Most of the money goes to fund state roads and infrastructure, but a significant amount also goes to fund the State Police.

Corman proposes plugging that deficit by using $500 million of federal relief dollars from the American Rescue Plan Act (ARPA) of 2021 to fund State Police and requiring the Pa. Dept. of Transportation (PennDOT) to take out a $650 million bond.

“That’s what those monies were meant for, to be used for emergency-type purposes,” Corman said.

Gov. Wolf announced on March 8 he supports a temporary federal gas tax suspension. The federal gas tax is 18 cents per gallon. The governor is more hesitant about suspending the state gas tax.

His office wrote in a statement:

“The governor recognizes that the increasing gas prices have an impact on all Pennsylvanians, especially those who are struggling and that's why he called on Congressional leaders to enact a federal gas tax holiday. The governor also is focused on providing direct relief to Pennsylvanians, which can be achieved through increased investments in education as proposed in his budget, which would give school districts the relief to lower property taxes, as well as the PA Opportunity Program he proposed as part of his plan for our remaining ARPA funds, and awaits legislative action on this.

As far as a state gas tax holiday, it's important to note that our gas tax is tied to funding fixing our roads and bridges through the Motor License Fund and that funding is critical to ensuring the strength of our infrastructure.

The federal gas tax holiday would utilize infrastructure dollars to make up for the tax revenue loss, whereas Sen. Corman's bill relies on ARPA funds and a bond.

We will review it once the bill has been introduced.”

Sen. Corman also supports a federal gas tax suspension, but criticized Gov. Wolf’s stance.

“That doesn’t make any sense,” he said. “Why should the federal government if we’re not willing to do it at the state level? I’m certainly for doing both.”

Drivers though, said saving a total of about half a dollar per gallon wasn’t worth the cost.

“You’re still talking 4 bucks a gallon. To me that just seems a little ridiculous,” said Bruce Greeninger of Harrisburg, who said his weekly gas bill has risen from about $150 per week to $200 per week.

“You do the math. It’s not a lot,” said Stephon Abney of Columbia. “So [the tax] is fine by me, not a problem.”

Senate Democrats have concerns that using federal COVID funds for tax relief would be illegal.

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