HARRISBURG – Gov. Edward Rendell is proposing an eight percent tax on oil companies as one way to fill a transportation funding gap.  The General Assembly could vote this fall to generate approximately $1 billion needed to improve the safety of state and local transportation systems and create jobs, Rendell and Transportation Secretary Allen Biehler, said Monday.

“Across Pennsylvania, and in both chambers of the General Assembly, there is strong consensus that our transportation systems are failing and something needs to be done now,” Rendell said, noting that both the House and Senate held numerous hearings on the issue throughout the summer.

A poll taken last week confirmed that 95 percent of Pennsylvanians believe that the quality of our transportation infrastructure matters to the state’s economy and 74 percent would support taxing the profits of oil companies to pay for the needed improvements. By a margin of 48 percent to 45 percent, residents favored increasing vehicle fees, some of which have not been raised in more than three decades, consistent with inflation to help pay for transportation infrastructure.

“This poll indicates that the road we must take is not problematic and we have a chance to do something of vital importance that benefits Pennsylvanians now and in the future,” the Governor said. “I think we should do more than these options provide, but legislators have told me that in an election year the political appetite in Harrisburg is too small to meet the full needs.

Following the Governor’s remarks, Biehler addressed a joint, bipartisan meeting of the House and Senate to outline two options that could be implemented this fall and in place by January. The measures would raise nearly $1 billion in the first full fiscal year and cost the average Pennsylvania driver approximately 33 cents per week:

• An 8 percent tax on the gross profits of oil companies doing business in Pennsylvania. Companies paying the tax would be exempt from the 9.99 percent Corporate Net Income tax. The new oil company tax would raise $576 million the first full fiscal year. Oil companies would be legally barred from passing the increase on to consumers.  The oil tax has not increased since 1997.

• Increasing a variety of license, registration and vehicle fees, some of which have not been raised since 1977. For example, the four-year drivers’ license fee would increase from $21 to $25 (the $7 photo charge would remain unchanged). The annual registration fee for a passenger car would increase from $36 to $49. The fee for a certificate of title would increase from $22.50 to $31.