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Using highway money for its intended purpose

May 2, 2019

The Pennsylvania auditor general created quite a stir recently when he unveiled an audit that said the Commonwealth had diverted more than $4.2 billion from the Motor License Fund (MLF) in the last six years to support State Police operations.

The MLF, as many PHIA followers know, was created to receive the revenue generated by fuel taxes and license and registration fees (and some fines) and, per the PA Constitution, be allocated strictly for highway purposes.

Many PHIA followers also have been aware that PA has been diverting revenue from the MLF for much longer than six years. While the annual diversions have been growing to support some three-quarters of the State Police budget, the total diverted amount now totals $9 billion since 2001.

Recently, as gasoline prices have again approached $3 per gallon, news reports have noted that Pennsylvania has the highest state gasoline taxes in the country, at about 58 cents per gallon.  Each penny of the gas tax produces about $65 million annually, so when the diverted amount exceeded $800 million in the last fiscal year, that meant that about 12 cents – more than 20 percent – of the tax was funding State Police operations instead of building and maintaining bridges and highways.

Following a study by the Legislative Budget and Finance Committee two years ago, the governor and General Assembly have started to walk back the diverted amount by 4 percent each year, until it gets down to $500 million.

However, the highway builders have a better idea. Since the first of the year, the industry has begun to advocate for trimming $65 million per year from the diverted amount – the equivalent to a penny of the gas tax. Doing that for 12 years will take the diversion down to zero, and all of the revenue generated for the constitutionally protected MLF will be used for bridges and highways.

The industry’s reasoning is that finding $65 million in a $30-billion-plus state budget through cost-cutting and improved efficiencies ought to be achievable. After all, it’s less than 2 percent of the budget, and it would, once and for all, address our highway funding needs, and do so without raising taxes again.

“During the push for Act 89 of 2013, the people of Pennsylvania were promised safer, less congested roads and improved quality of life,” said PHIA Managing Director Jason Wagner. “It’s not unreasonable to expect that promise to be kept.”

 

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