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Falling Gas Prices Will Have No Effect on New PA Funding Law

December 10, 2014 by · Comments Off on Falling Gas Prices Will Have No Effect on New PA Funding Law
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Price changing on gas signRetail gasoline prices have fallen to the lowest levels in more than five years, and many are wondering whether this drop will negatively affect the revenue available from the recent enactment of Act 89, PA’s most significant comprehensive transportation funding law since 1997.

The answer is no…but here’s why.

Act 89 did not change the fact that Pennsylvania’s highways are still funded by a user-pay system. Fuel taxes on gasoline and diesel remain the cornerstone of this user pay system. However, only about 11 percent of the actual price of a gallon of gasoline is determined by federal and state taxes. The vast majority is dependent upon the market price of crude oil.

The authors of Act 89 were wise in that they protected the state revenues derived by Act 89 and by effectively freezing the calculation rate used to determine that state tax level. Prior to Act 89, a large portion of the state tax rate was dependent upon a calculation of the average wholesale price of gasoline and then was run through a formula. An artificial cap was placed on this calculation formula in the mid 1980’s. This is the main reason Pennsylvania’s highway funds became stagnate because the cap was reached in the early 2000’s. Read more

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Gas prices edging up, but are expected to remain lower than last year

February 25, 2014 by · Comments Off on Gas prices edging up, but are expected to remain lower than last year
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Gasoline price watchers are expecting prices to rise in coming weeks, as they usually do in the spring, but not to the extent that they have in the past.

The Kiplinger Letter predicts that the national average price for unleaded regular, at $3.39 per gallon about a dime higher than a week ago, will peak at about $3.60 before leveling off by late spring.

The cause for spring price spikes is maintenance-related refinery closures and the switch to summer gasoline blends. Kiplinger projects that the prices will remain lower this year compared with last.

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The cost of doing nothing

March 29, 2012 by · Comments Off on The cost of doing nothing
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PennDOT Secretary Barry Schoch frequently points out that there are costs for NOT addressing transportation funding needs.  A new U.S. Treasury report says traffic congestion wastes 1.9 billion gallons of gasoline per year.  Additionally, the report says, poor road conditions cost the average urban motorist an additional $400 per year in vehicle maintenance.  For a news account of the report, click here.

 

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Experts say gasoline consumption will continue to decline

December 21, 2010 by · Comments Off on Experts say gasoline consumption will continue to decline
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Associated Press energy writer Jonathan Fahey, in a well-researched article published across the nation this week, reports that even once the recession is behind us, demand for gasoline is not likely to return to its peak of 2006. Read more