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Pennsylvania Governor Calls for Tax Changes to Spur Economy

Wednesday, February 6, 2013
ByLorraine McCarthy

PHILADELPHIA--Gov. Tom Corbett (R) proposed a $28.4 billion fiscal year 2014 spending plan Feb. 5 that would raise additional revenue for transportation infrastructure projects by phasing out a cap on the wholesale gasoline tax paid by the oil and gas industry and attempt to spur job growth by trimming a number of business taxes.

Corbett's recommended budget, which he presented to a joint session of the General Assembly, represents a 2.4 percent increase in state spending over the current fiscal year, which ends June 30.

The governor's long-awaited transportation funding proposal relies on boosting revenue from Pennsylvania's oil company franchise tax, an excise tax that distributors pay based on the wholesale price of liquid fuels.

The tax applies only to the first $1.25 a gallon of the price, a ceiling that was reached in 2006, which means revenue has not grown for the past seven years.

Corbett proposed to phase out the cap over the next five years, a move he said will increase oil company franchise tax revenues by $1.8 billion by the time the cap is eliminated on Jan. 1, 2017, allowing the state to begin closing a huge gap in funding for highway and bridge repair, replacement, and upgrades.

Proceeds of the tax would increase by a projected $553.2 million in fiscal 2013 following the first step of the phase-out, which would be effective July 1.

By Lorraine McCarthy


Text of the Pennsylvania governor's fiscal year 2014 budget address and budget documents is at

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