Falling gas prices have been the best surprise this holiday season for many Lancaster County motorists.
With average pump prices about 90 cents lower than they were a year ago, some families may have been able to set aside some cash for a few more gifts.
But it will soon cost more to fill up at the gas pump when the state raises the wholesale gasoline tax by 9.8 cents a gallon in the new year.
Because the increase will be applied at the wholesale level, it’s difficult to know how much of an impact it will have on current pump prices. But drivers should expect to pay more.
The tax hike is part of the massive transportation package signed into law last fall. The plan was designed to pump $2.3 billion over the next five years into the state’s crumbling roads, bridges and mass transit systems.
The centerpiece of the law was new revenue from lifting the cap on the wholesale gasoline tax paid by retailers. Studies have shown the price could possibly increase by 28 cents a gallon when the plan is fully implemented.
A 9.5-cent increase that took effect a year ago added more than $800 million to the state Department of Transportation’s budget. The 2015 tax increase is expected to add another $800 million to the budget.
The tax is expected to increase again in 2017, completing the three-phase implementation of the law.
Lancaster County’s state lawmakers from both sides of the aisle, and in both chambers, stood united in support of the law — a top priority for Gov. Tom Corbett.
While about half the money is directed toward state-owned roads and bridges, local legislators were pleased that the deal set aside extra $25 million to help cash-strapped municipalities pay for projects.
Lancaster County saw its liquid fuels allocations rise by nearly $1 million in 2014 because of the new law.
Funds are allocated based on municipal population and road miles. Payments ranged from $24,933 in Christiana Borough to a little more than $1 million in Lancaster city.