Despite the Legislature's refusal to raise state gasoline taxes, the tax is going up on Jan. 1 anyway, and the increase may provide a reprieve to the financially starved Port Authority.

A little-known provision in the state's oil franchise tax, which is part of the gasoline tax, will cause the tax to rise, Pennsylvania Department of Transportation spokesman Rich Kirkpatrick said yesterday.

The amount of the increase is 3.8 cents a gallon, other officials said.

Kirkpatrick said that when the Department of Revenue recently finished annual calculations on which the oil franchise tax is based, gasoline prices over the last 12 months moved the tax to a higher level for 2005.

That has never happened since the oil franchise tax was enacted more than a decade ago, with a provision to increase it as wholesale fuel prices increased.

The remainder of the state gas tax is a flat amount, not subject to change as gas prices fluctuate.

Although oil companies pay the franchise tax at the wholesale level, the price is passed on to consumers at the pump.

Kirkpatrick estimated PennDOT's share of the increase at $133 million for highway and bridge projects.

Another $120 million will go for highway maintenance, to municipalities to use for local roads and the Pennsylvania Turnpike for toll road expansion.

PennDOT and Gov. Ed Rendell said they are willing to "flex" their $133 million share and cut $57 million in planned highway and bridge projects to raise $190 million to aid public transit.

That would be enough for the Port Authority and Philadelphia-based Southeastern Pennsylvania Transportation Authority to balance their operating budgets this year and for the 2005-2006 fiscal year that begins July 1.

It also would avert the doomsday scenario that Port Authority officials were contemplating yesterday after the state Legislature adjourned without addressing fiscal crises at the Port Authority and SEPTA.

Staff of the Port Authority, the nation's 15th-largest public transit agency, yesterday started planning to carry out what has been threatened for months: increasing fares, eliminating weekend bus, trolley and paratransit service and weekday service after 9 p.m., closing a bus garage and sending pink slips to about 500 employees.

Chief Executive Officer Paul Skoutelas has said the system would be a "skeleton of itself" after 40 years in business.

The Port Authority faces a $30 million shortfall for the current budget year, which is already five months old, plus an estimated $45 million deficit for next year.

Before the Legislature ended its business over the weekend, the highway industry and its supporters tried to persuade lawmakers to raise the gas tax by 8 cents a gallon.

The initiative was caught up in political maneuvering tied to long-range transit aid and legislative pay raises and never came up on the House or Senate floor.

The last gas tax increase came in 1997, when the oil franchise tax was raised 3.5 cents a gallon, part of a $400 million revenue package.

Each one-cent increase generates about $66 million per year.

While the 3.8-cent increase is a certainty, assistance for the two troubled transit agencies is not.

In order for transit funding to move forward, Kirkpatrick said, PennDOT, metropolitan planning organizations that decide transportation funding priorities and rural planning partners "would have to reach a consensus."

Locally, the planning body is the Southwestern Pennsylvania Commission, which represents Allegheny and nine surrounding counties.

Neither the SPC nor highway lobbyists were happy last year when PennDOT "flexed" $10 million in federal highway funds to stave off a fare increase and service cuts at the Port Authority.

The $133 million generated by the oil franchise tax would be substituted for federal highway funds, which would be shifted to the mass transit agencies.

No state legislative approval would be needed.

Before word of the gas tax increase, Skoutelas said the Port Authority was "proceeding under the assumption that no additional state money is forthcoming."

"The more important point is the horrific impact this will have on the community, riders and the system. It puts us in a downward spiral of less riders, less revenue and more cuts. I don't see how we can work our way out of this."

The Legislature adjourned in the wee hours Sunday morning, providing $6 million for small transit systems but ignoring the Port Authority and SEPTA, which faces a $62 million shortfall this year and is also looking at a $2.50 base fare and massive bus-rail service reductions.

SEPTA mailed layoff notices yesterday, complying with federal law requiring a 60-day advance notice to workers who will lose their jobs.

Skoutelas said he was "researching the same issue" but will consult with the authority board before mailing pink slips.

Because the authority is so far into the current fiscal year, he said a proposed Feb. 1 fare increase may be moved up one month and service cuts supposed to go into effect March 6 also may be moved up if no state funding is forthcoming.

"There's a statutory requirement that we finish the year with a balanced budget but none requiring the state to provide the adequate public funding for it," Skoutelas said. "We're moving ahead under the presumption that the board will have no choice but to do the fare increases and service cuts that we've been talking about."

One way or another, all of the people who account for 225,000 rides on an average weekday will be affected. About half of the 140,000 workers, students and others who commute to Downtown do so by using public transit.

The Legislature's decision to leave Harrisburg without addressing the transit funding issue has infuriated Save Our Transit. The ad hoc group has lobbied for months, sponsoring rallies and circulating petitions seeking legislative support for a bill that would have lifted a $75 million cap on the amount of sales tax dedicated to public transit.

When the bill failed to gain support, state Rep. Dwight Evans, D-Philadelphia, offered a $110 million plan that would have raised fees, including taxes on new tires, rental cars and the charge for copies of motor vehicle records.

Republican leaders in both the House and Senate prevented the bill from coming to a vote, saying it created new taxes.

Save Our Transit will hold a rally at noon tomorrow at the City-County Building on Grant Street. Leaders of the group, which operates under the umbrella of the Thomas Merton Center, have been talking about a hunger strike and acts of civil disobedience.

The nine-member Port Authority board meets at 9:30 a.m. tomorrow. Skoutelas said members are not likely to formally enact a fare increase and service cuts, because the staff needs more time to work out details and options.

The board is expected to discuss measures at a Dec. 13 committee meeting and take a formal, final vote on Dec. 16.

Skoutelas said he expects to have an idea of job terminations before then and will proceed to send out pink slips.

Efforts to contact Local 85, Amalgamated Transit Union, which represents 2,700 operators, mechanics and other hourly employees, were unsuccessful. Union officials also joined the lobbying effort in recent months.

Most of the 500 people who stand to lose their jobs are members of Local 85, although Skoutelas said "some level" of management and supervisory personnel will be included.

In addition, because of cuts in ACCESS paratransit service, another 150 people will be affected, from private companies to drivers and mechanics with larger firms that provide a shared-ride, advance-reservation system for the very elderly and people with special needs.