Westmoreland towns may delay road work over covid-19 impact on liquid fuels tax

Municipalities across the state could be forced to delay road projects in the coming year after PennDOT’s liquid fuels tax took a hit during the coronavirus pandemic.

The amount raised from the 57-cent-per-gallon tax for this year, about $486 million, is expected to drop in 2021 after fuel prices plunged when covid-19 all but halted travel and daily commutes as people stayed home to try to curb the spread of the virus.

Locally, stay-at-home orders put in place by Gov. Tom Wolf caused traffic to fall by 45% on main roadways and 55% on arterial roads in March, said Erin Waters-Trasatt, PennDOT spokeswoman.

By April, U.S. oil prices were in the negative, meaning anyone trying to sell a barrel of oil would have to pay the buyer $30, The New York Times reported.

At the time, the International Energy Agency reported oil demand could drop by 20%, or 20 million barrels a day. That’s the same as eliminating all U.S. consumption, the newspaper said.

“Since travel overall is down, less fuel is being purchased and it’s likely that we will need to make adjustments,” Waters-Trasatt said of the tax.

“At this point, it’s too early to determine exactly what the impacts will be. Travel being down overall indicates that people are heeding the guidance of Gov. Wolf and Dr. (Rachel) Levine and doing their part to help mitigate the spread of covid-19.”

While funding was already distributed to local municipalities for the year, governments are preparing to take a hit next year. According to Waters- Trasatt, how much money communities could lose in terms of the tax is not yet available.

In Arnold, less funding could be detrimental for the city, said Mario Bellavia, city administrator.

“Being that we’re a distressed city and our revenues have been possibly impacted by covid-19, when we do our budget, the liquid fuels tax is critical to balancing our budget,” Bellavia said. “Without it, we’d have the potential of running a deficit.”

This year, Arnold received more than $172,000 in liquid fuels funds, used to cover costs for a new salt shed and to pay electric bills, Bellavia said. He added city officials looked for reduced insurance rates and switched to LED lights to save money.

“We’ve looked at everything, and I’m not sure where else we could make cuts,” he said.

In Hempfield and North Huntingdon, paving and capital improvement projects may need to be cut if funding comes in under budget, township officials said.

Richard Albert, director of public works for North Huntingdon, said officials are working to trim the budget as much as possible for the current year.

This year, the township received more than $1 million in liquid fuels money, which was put toward the annual paving program.

“At this point, we have no idea what it’s going to be like as far as our liquid fuels go, what we’ll be receiving (next year),” Albert said. “All we know is to be prepared to take a pretty good reduction because of everything that’s going on.”

Albert noted, in the coming year, capital projects that are non-emergency may have to be postponed.

Similar measures could be taken in Hempfield, said Township Manager Jason Winters.

This year, the township received more than $1.5 million in liquid fuels funds, most of which will be used for a $1.3 million paving project.

Still, Winters said he was not concerned about receiving a lower amount next year.

“Because we have some savings, we can roll over some of it possibly next year, so our savings from this year could help negate any shortfalls next year,” he said. “Depending on how budgetary things go, if we have to move other road materials into that, we can.”

In Bethel Park, funds from the liquid fuels tax are used for salt purchases, said finance director Joe Villella. How the municipality is impacted by less funds, Villella said, is dependent on the weather during winter months. This year, Bethel Park received over $982,000 in liquid fuels funds.

“A lot of us are in the same boat,” Bellavia said of the tax. “It’s a critical, critical piece to city government.”