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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | July 17, 2013 03:21 PM |
|---|---|
| From: | Representative Brad Roae |
| To: | All House members |
| Subject: | Moving money from the General Fund into the Motor License Fund |
| In the near future, I plan to introduce legislation that would give PennDOT an additional $1.7 billion a year by 2023. In 2014 PennDOT would get $120 million more and it would increase each year until they were getting the full $1.7 billion, ten years from now. Currently, we collect about $1.2 billion a year in sales tax from motor vehicle sales and all of it goes to the General Fund. I am proposing that over a 10 year period we gradually move that revenue stream into the Motor License Fund. The breakdown would be as follows:
By 2024 there would be no sales tax from motor vehicle sales going to the General Fund and 100% of it would go to the Motor License Fund. The $120 million that we would move to the Motor License Fund is less than 4/10 of 1% of the projected $28.4 billion 2014 – 2015 General Fund Budget. We would still have 99.6% of the funding for the General Fund Budget. This change would force us to better prioritize General Fund spending. Motor vehicle prices increase with inflation each year, so the 6% sales tax automatically increases over time. The $1.2 billion current sales tax on motor vehicles would actually grow to about $1.7 billion with inflation over the next 10 years. Ten years from now, PennDOT would have $1.7 billion more each year and this number will keep going up with inflation. This is not as much money as PennDOT desires but it is more than what we had approved for them on June 30th, 2013. It makes perfect sense for a tax on motor vehicles to be used for things they utilize such as roads and bridges. People who pay a 6% tax on their vehicle would fully support having that money go to the roads and bridges they drive on. As gas mileage increases, gasoline tax revenue will decrease. Vehicle prices will continue to increase and the sales tax will increase. This proposal gives PennDOT an automatic inflation adjusted revenue stream. In summary, the advantages of this proposal are:
This proposal would be viewed as a pro-business vote since an improved infrastructure would help businesses. It would also be viewed as a pro-union vote since thousands of highway construction jobs would be created. It would not violate no tax increase pledges that some Legislators have signed. Lastly, it would allow for more bridges and more roads to be repaired. The new General Fund Budget spends about $77 million a day. This proposal would only involve about 1½ days of revenue for the entire 365 day fiscal year. In the first year, we would still have 99.6% of the General Fund revenue. The numbers I looked at show that PennDOT only anticipates gas tax revenue to grow by $30 million from 2013 to 2016. This proposal would actually give PennDOT $360 million more by 2016 and it would give them $1.7 billion more each year by the year 2023. Please do not hesitate to contact me should you have questions regarding this legislation. |
Introduced as HB1630