State Rep. Doug Mastriano (R-Franklin) said a gas tax holiday and an electric vehicle fee would help the state economy by saving consumers money while continuing to finance the roads fund.
In an op-ed on Friday, Mastriano said that nationwide inflation is hitting Pennsylvania consumers hard and that reducing the gas tax is one way to give them some relief. Pennsylvania’s gas tax of 58 cents per gallon is the highest in the country, he said.
Mastriano said he is proposing a six-month gas tax holiday that would lower the gas tax by 26 percent. Doing so would lower gas rates by 15 cents per gallon. He said the average price of a gallon of gas in the state is $3.22 compared to $2.44 at the same time last year.
“Some are of the opinion that the benefit of a six-month gas tax cut would not be passed on to consumers because the tax is ‘indirect’ and not imposed at the point of sale,” Mastriano said. “I disagree with this assertion. In a free market with open competition, fuel wholesalers still must compete with one another for the business of retailers such as Sheetz and Wawa. Additionally, the consumer demand for gas varies with price. This means that it is in the wholesalers’ best interest to allow the price of a gallon of gas to drop at least temporarily… Just as the incremental gas tax hike known as Act 89 has led to higher prices for consumers, I believe that a tax decrease will have the effect of saving consumers money when they go to fill up their vehicle.”
Mastriano said the gas tax holiday would stimulate the economy by lowering the cost of travel, allowing residents to travel to other parts of the state for leisure.
To ensure that the gas tax holiday does not negatively impact the state’s revenue for improving Pennsylvania’s roads and bridges, Mastriano’s bill also includes a one-time fee on hybrid and electric vehicles in the state.
“Those who own these types of vehicles do not feel the full effects of a high gas tax but are still able to benefit from the roads and bridges funded by that tax,” Mastriano said. “I believe it be perfectly logical to ask these owners to pay their fair share through an increase in registration fees.”
The legislator said he hopes his bill can start a full phase-out of the gas tax in the future.