Pennsylvania: Gas Tax Truth Starts to Sink In

By May 29, 2007Energy

Below we’ve related the latest development in Wisconsin Governor Jim Doyle’s scheme to raise fuel taxes while making it a crime to pass the costs onto consumers. Short take: Unconstitutional, invidious, and the underlying tax still works out to 7 cents a gallon.

In Pennsylvania, Governor Ed Rendell has been promoting the same kind of taxing sleight of hand, the major difference being his less frequent bashing of oil companies. But now, hmmm, his eagerness for this particular tax wanes:

HARRISBURG, Pa. – Barely a month before the deadline for approving a new state budget, Gov. Ed Rendell’s enthusiasm appears to be waning for some of the more than $2 billion in tax increases he has proposed….

Rendell also allowed that his plan to tax oil company profits to provide money for public transportation in the state may not be necessary, although he said that hinges on legislative approval of his proposal to lease the Pennsylvania Turnpike to a private operator.

The rest of the AP story recounts Rendell’s remaining tax preferences, which are still aplenty, but the slippage in the oil tax is good news. And the political pressure continues to grow:

The board of the Lancaster Chamber of Commerce & Industry is taking aim at Gov. Ed Rendell’s proposals to increase the state sales tax and impose a new tax on the gross profits of oil companies doing business in Pennsylvania.

Rendell wants to bump up Pennsylvania’s sales tax from 6 percent to 7 percent and enact a 6.17 percent gross-profits tax on oil companies.

“Raising existing taxes and creating unfairly-targeted new taxes might provide a quick-fix fill to a budget gap, but what Pennsylvania really needs is comprehensive tax reform aimed at ensuring our state’s economic competitiveness,” Chamber President Tom Baldrige said in the chamber’s position statement. “These two proposals, coupled with the recently voter-rejected Act 1 proposal, are not only onerous to business and the consumer, they also suggest we are in a state without a comprehensive tax strategy.”