Tag Archives: fee

How Much Do Users Pay for PA’s Roads?

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The Governor has let the cat out of the bag, or maybe, more apropos, some of the air out of the tire, on a holistic transportation fix for the Commonwealth. Part will be a proposal to take away a cap on the Oil Company Franchise Tax, a tax that is levied upon gas at the wholesale level but presently applies to the first $1.25 of the wholesale price. Removing the cap to apply the tax to the entire wholesale price, and by one estimate reported in a newspaper article would generate $1.8 billion on top of the $1.3 billion currently collected with the cap.

That was but one recommendation made by the Governor’s Transportation Commission in 2011; others include paying more in fees and registrations but lessening the frequency at which driver’s licenses and auto registrations must be renewed.

Its not clear what lifting the Franchise Tax cap, license proposals, etc. will mean for the end user, the person filling their gas tank and traversing one of Pennsylvania’s roads. A recent study by the Tax Foundation shows that nationally gas taxes, tolls, and other user fees generated just a third of the spending on roads-the rest comes out of general revenues. According to their analysis Pennsylvania is right at the national average: 33%, ranking it 18th out of the 50 states. Outliers include Alaska, Wyoming, and the Dakotas generating 20% or less of road spending from "user fees" and Delaware, Florida, and New Jersey at 49% or more of road expenditure coming from gas taxes, tolls, and driver related charges. Another Foundation document shows that as of 2013 Pennsylvania has the 7th highest gasoline tax at 39.2 cents per gallon (Connecticut has the highest at 56.2 cents, Alaska the lowest at 8 cents).

Another BID at Improvement

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Several months after City of Pittsburgh voters opted to increase their property taxes in order to fund the Carnegie Libraries and after residents and businesses in the South Side never got a chance to see if a Neighborhood Improvement District (NID) concept would come to pass and what higher taxes would do for improvements in that part of the City, the next improvement district is being proposed in Lawrenceville this week in City Council.

There are still only two improvement districts in the City, one in Downtown and one in Oakland. Others have been tried in East Liberty, West End, and the aforementioned South Side. If the opposition to the proposed Lawrenceville BID reaches the point where 40% or more of the affected property file objections to the plan then the BID plan does not move forward.

According to published reports the fee assessed on businesses would be based on the linear storefront width rather than on property value which would likely see big changes as the new assessments would likely be in effect about the time the approval process would be completed.

Who Pays for Police Protection?

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Nearly half of Pennsylvania’s municipalities rely on the State Police to provide their police services. Some very large municipalities, such as Hempfield in Westmoreland County, are in that group. The question is should the Commonwealth change this situation? For the half of municipalities that pay for their own police forces or pay other municipal forces to provide the services, there is obvious double and unfair taxation. One, to pay for their own police and two, to subsidize through their state taxes the State Police services used by the municipalities without their own police forces.

Clearly, something should be done to rectify this situation. As municipalities find it ever more difficult to raise enough money to fund their core functions including police and their pensions, more and more will choose to eliminate their police departments and utilize state provided police services. If the state does not increase its funding of police services, the State Police will become spread ever thinner and their effectiveness undoubtedly diminished. On the other hand, if the Commonwealth allocates more dollars to fund police to provide coverage to the rising number of municipalities who are dropping their own departments, then that will mean increasing the effective tax burdens on the taxpayers in municipalities still providing their own police, thereby exacerbating the unfair double taxation.

There are only two fair ways to deal with this problem. First, the Commonwealth could impose a fee on the municipalities who have opted to go with State police protection. The charge could be in two parts. One charge would be an upfront per capita fee to pay for routine patrols and the second a per incident fee each time the State Police are called to respond to a crime or other situation requiring police presence.

Second, the Legislature could pass a bill eliminating all municipal police forces and require all policing to be done by State provided personnel and resources. That would vastly enlarge the State police force but it would eliminate the unfairness faced by municipalities who pay for their own police and also subsidize State provided service to the municipalities who refuse to pay for a police department. Clearly, this solution is not an appealing one but as the burden of policing falls ever more heavily on the State and the inequity of the situation worsens, it might be the only answer.

It would be far better for the Legislature in the very near future to come up with a reasonable fee schedule as proposed above so as to reduce the double burden faced by the municipalities who provide their own police. It should not be beyond the wit of man to calculate a fair fee schedule based on the costs being incurred by State Police in their role as local police. Those who adamantly oppose paying anything for State Police protection are basically arguing for a free ride.