PAs Coming Transportation Taxes: When a user fee is a tax

HARRISBURG, PA — Lawmakers in Harrisburg are hailing a budget without tax increases, but the Commonwealth Foundation noted that the effect of the transportation funding proposal will be a significant tax increase on Turnpike and I-80 commuters.

Under this proposal, the Pennsylvania Turnpike Commission’s power and authority will be expanded to include the ability to bond for $5 billion to underwrite new spending on mass transit and other transportation projects. New tolls on I-80 and higher tolls on the Turnpike will be used to pay down the principal and interest of nearly $10 billion over the next several decades.

“Most Pennsylvanians are willing to pay ‘user fees’ for government services they use, such as state parks or the Turnpike,” said Matthew J. Brouillette, president of the Commonwealth Foundation. “They understand that their fees are used for the operation and maintenance of the services they are utilizing. But a ‘user fee’ becomes a ‘tax’ when those monies pay for something other than the service being used.”

The transportation funding proposal, which passed the Senate and is being considered by the House, would take “user fees” in the form of higher tolls on the Pennsylvania Turnpike—25% higher in 2009 and 3% higher each year thereafter—as well as new tolls on I-80, in part to pay for the operation and maintenance of mass transit systems, primarily in Philadelphia and Pittsburgh.

“This is clearly a tax increase on the people of Pennsylvania. By taking the tolls from the Turnpike and I-80 and sending it to SEPTA and PAT, these ‘user fees’ have become ‘taxes,’” said Brouillette. “There is simply no way around the fact that this proposal will raise taxes on Turnpike and I-80 users in order to subsidize mass transit in Philly and Pittsburgh.”

“What’s worse is that these hundreds of millions of tax dollars will be sent to systems that have not reformed themselves,” said Brouillette. “Taxing Turnpike and I-80 users to pay for SEPTA and PAT’s operational inefficiencies is only throwing good money after bad.”

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The Commonwealth Foundation is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

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