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Locals React To Proposed Budget, End Of Gas Tax Cap

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PITTSBURGH (KDKA) — Gasoline prices continue to rise this week and the price could go higher if lawmakers approve Gov. Tom Corbett’s plan to raise the cap on the state’s oil franchise tax.

“I am asking the General Assembly to begin a five-year phase out of an artificial and outdated cap on the tax paid by oil and gas companies on the wholesale price of gasoline,” Corbett said Tuesday.

Lifting the cap means higher taxes on the oil industry to help finance a five-year, $5.3 billion transportation initiative to repair roads and bridges and fund public transit.

“The average bridge in our state is 51 years old,” Corbett said. “More than 4,000 of them are now deemed structurally deficient … Our mass transit system has staggered under growing demand, aging infrastructure, and a lack of funding.”

Although the tax is on the oil company, Duquesne University professor Kent Moors expects it to be passed along.

“Most of those increases, one way or the other, will end up hitting the pocketbook of the average consumer,” Moors said.

How much gasoline prices will go up because of this tax is really unclear. Experts say prices of gasoline are going up anyway, and this tax would be phased in over the next five years.

Moors says the tax hike could total 28 cents over five years, but is necessary.

“We desperately need these revenues — just look at all the potholes we have around Pittsburgh and all the bridges that could go at the same time,” Moors said.

But some need to be convinced.

  • See Christine D’Antonio’s report:

People at the pump Tuesday were irritated about the news.

“Is that what it’s going to be used for?” Edward Thompson of Shaler said. When asked if he was skeptical, he said, “yes, very.”

And others say the state already taxes too much at the pump.

“Definitely,” Julie Conley of Glenshaw said. “Taxes are way too high.”

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