HARRISBURG, Pa. — With the New Year comes a new gas tax hike in Pennsylvania, which already has the third-highest state gas tax in the country.
The tax on gasoline will increase by 3.5 cents to 61.1 cents per gallon. The tax on diesel will increase 4.4 cents to 78.5 cents per gallon.
It goes into effect automatically on Jan. 1, 2023 because of Act 89, a law signed by Gov. Tom Corbett in 2013. The law was meant to help pay for the state’s roads and bridges.
PennDOT got 32 percent of its funding from the gas tax in 2021. Officials there have long warned of a growing gap in infrastructure funding, as cars become more fuel efficient and the state collects less in gas tax.
Since 2013, approximately two-thirds of states have taken actions to raise their fuel tax revenues, according to the National Association of State Budget Officers’ 2021 State Expenditure Report.
Already claiming the third-highest state gas tax rate in the country—behind California and Illinois—with the increase Pennsylvania will jump to the second-highest state gas tax rate.
Still, experts pointed out that many other states have other sources of infrastructure funding.
“It’s different in every state, so a comparison of what the gas tax is in every state is kind of an apples and oranges comparison,” said Ted Leonard, executive director of the Pennsylvania AAA Federation.
The tax may not greatly affect prices for several reasons. First, the tax is on the wholesale price, not the retail price, so retailers may not pass on the cost.
In addition, more than 50 percent of the cost of gas is based on crude oil prices. Taxes, meanwhile, make up less than a fifth of the total cost.
“The tax may go up, but it’s also possible that the price of crude oil could go down,” Leonard said.
Prices of crude oil have in fact gone down in recent months, as the average gas price in Pennsylvania fell from a high of $5.07 per gallon in June to $3.59 per gallon now.
For some drivers, the current lower prices are cushioning the blow of a small increase.
“I guess everybody’s kind of gotten used to it. When you’re paying almost $5 a gallon and it’s $3.50, it kind of seems like that’s lower than what it should be,” said Morgan Hoenninger of Lancaster.
State legislators from both parties agree that high gas prices are a problem for drivers, but disagree about how to bring them down.
Some Democrats have advocated for measures to combat price gouging, while some Republicans have called to cap the state gas tax.
State Rep. Joe D’Orsie (R-York) plans to introduce a bill to cap the tax, according to a press release.
In anticipation of the tax rate hike, Gov. Tom Wolf’s office wrote in a statement,
“Gov. Wolf has repeatedly called for phasing out the gas tax because it's a burden on Pennsylvanians, and it’s not getting the job done. But to eliminate the gas tax, we need to identify an ongoing, steady revenue source for infrastructure funding – one that will give Pennsylvania the resources we need to repair roads, keep bridges safe and guarantee clean air and water for all. The governor encourages the General Assembly to look for alternative funding sources that can replace the gas tax, repair our aging infrastructure and set Pennsylvania up for success in the 21st century.”
Governor-elect Josh Shapiro’s team could not be reached for comment on whether Shapiro would sign a law capping the state gas tax.