Legislation proposed for Pa. gas tax holiday
It’s taken her more than four months, but Sen. Lisa Boscola, D-Lehigh/Northampton, has filed legislation to create a two-month sales gas tax holiday in Pennsylvania.
Five states have suspended gas taxes or a gas tax increase, including New York, which cut 16 cents a gallon from the state’s gas taxes. Several other states, including Pennsylvania, are still weighing proposals to suspend gas taxes. Boscola’s proposal isn’t the first, but simply the latest bill to be introduced in Pennsylvania.
If successful, the state will not be collecting the 6% sales tax in June or July this year. Collection of the state’s Liquid Fuels Tax would resume after the Labor Day holiday.
Senate Bill 1293 proposes using $150 million in COVID-19 relief money to help pay for the Pennsylvania State Police budget as well as state Transportation Department bonds to cover the difference in gas tax money for infrastructure projects.
“It is pretty clear everyone is hurting from the effects of inflation,” Boscola said. “Whether you are a teacher, police officer, iron worker, warehouse worker, retiree or recent college grad, everything you need is more expensive.” Boscola continued, “I was looking for a way for the state government to provide some temporary relief for everyone without creating a new program or application process. Price increases are impacting everyone’s bottom line and while state government cannot fix monetary policy or national product shortages, we can find ways to help our families without creating red tape.”
Boscola’s proposal isn’t the only one up for consideration. Earlier this year, Sen. Jake Corman, R-Centre/Mifflin/Juniata/Huntingdon, introduced Senate Bill 10, the Consumer Gas Prices Relief Act, to lower the state’s liquid fuels tax by one-third through the end of the year while also using federal stimulus money to help pay for Pennsylvania State Police operations so money wouldn’t need to be taken from the state’s Motor License Fund. Corman is also calling on a $650 million bond to pay for infrastructure work that would have been paid for with gas tax receipts.
Sen. Scott Hutchinson, R-Butler/Clarion/Forest/Venango/Warren, has signed on as a co-sponsor of the legislation along with a bipartisan group of 14 other senators. At the time Corman introduced his legislation, the price of a gallon of gasoline in the Warren area was about $4.29 a gallon. Now, it’s $4.99 a gallon.
President Joe Biden called Wednesday for a suspension of gas and diesel taxes while also calling on states to suspend their own gas taxes or provide similar relief. Suspending the federal gas tax could save U.S. consumers as much as 18.4 cents a gallon.
The Biden administration has already released oil from the U.S. strategic reserve and increased ethanol blending for the summer, in additional to sending a letter last week to oil refiners urging them to increase their refining capacity. Yet those efforts have yet to reduce price pressures meaningfully, such that the administration is now considering a gas tax holiday. Taxes on gasoline and diesel fuel help to pay for federal highways.
Administration officials said the $10 billion cost of the gas tax holiday would be paid for and the Highway Trust Fund kept whole, even though the gas taxes make up a substantial source of revenue for the fund. The officials did not specify any new revenue sources.