State Gas Tax Holiday Legislation Proposed
With the high price of gasoline intensifying as a political issue in recent weeks, there is discussion in Harrisburg regarding proposals to lessen their impact on consumers.
Senate President Jake Corman (also a candidate for the GOP nomination for Governor) has introduced Senate Bill 10.
This legislation would reduce motor fuel taxes by 20 cents a gallon until the end of the year. This plan would replace the monies lost to the Motor License Fund two ways.
It would transfer $500 million of federal COVID to funding the state police (which are currently paid by gas tax revenue). It will also authorize a $600 million bond to replace other transportation needs.
Early response by state House leaders has been to question the legality of using federal COVID funds for this use, and a general opposition to bond issues (borrowing).
Late last week, House Representative Anthony DeLuca introduced House Bill 2453 which would suspend the entire state gasoline tax (58 cents) and the entire state diesel tax (74 cents) for an 180 day period. This proposal does not directly define how the gap in liquid fuels tax collections would be replenished.
PPA has been educating key legislators as to the complexities of the motor fuel tax system and some of the unintended consequences of a gas tax holiday that could result.
This has included sharing details of the gas holidays that have been recently adopted in Maryland and Georgia. These states provide refunds for retailer who had possession of product for which tax had been paid-and still in possession at the time the holiday took effect.
Attorney Josh Shapiro (the Democratic candidate for Governor) released an alternative plan that would include a $250 payment (per registered vehicle).
The Shapiro plan would also be funded from COVID funds, which for this use legal observers indicate would likely be allowable under federal law.
At this point it is unclear what course these proposals will ultimately take in the legislature.