How big of a hike?
Some legislators suggest revising Gov. Dewine’s proposal for 18-cent gas-tax increase
Perhaps the only thing more plentiful than the potholes on Ohio’s roads these days is the angst in the Statehouse among legislators staring down a proposed $1.2 billion-a-year gas-tax increase.
So far, no one has argued that Ohio doesn’t need more money for road construction and maintenance. And Gov. Mike Dewine showed he’s not about to tiptoe around the problem, proposing in his two-year, $7.4 billion transportation budget an 18-cent tax increase on a gallon of gas that would take effect July 1.
That is a 64 percent increase over the current 28-cent tax, which hasn’t been touched since 2005. He also wants the tax to continue to rise with inflation after 2020, which would add 8 cents by 2030 if inflation remains on its current pace.
A tax increase “is sorely needed,” said Rep. Gary Scherer, R-circleville, vice chairman of the House Finance Committee. “I don’t know if that’s the right number or not.
I’m not opposed to the conversation.”
The Transportation Department estimates that someone driving 13,000 miles per year in a 2015 Ford F-150 pickup truck with a V-8 engine would pay an extra $2.65 per week — $138 per year.
The cost for the same miles driven is estimated at $1.91 per week ($99 a year) for a 2015 Jeep Cherokee and $1.61 per week ($84) for a 2015 Honda Accord.
“Due to flat revenues, highway-construction inflation and mounting debt payments, ODOT is in jeopardy of being unable to fulfill its mission,” state Transportation Director Jack Marchbanks told legislators.
Marchbanks said the Dewine administration is neutral on other funding ideas, such as fees on hybrid and electric vehicles, but he noted that Ohio has so few of those vehicles that such fees would be likely to raise less than $5 million a year. Other possibilities such as taxing vehicle miles driven aren’t
close to ready.
“The reality is the motorfuel tax is ... the most reliable metric we have to assess and collect this user fee,” he said.
Rep. Adam Miller, D-columbus, said he is concerned about the regressive nature of the gas tax — meaning that it has a bigger impact on lowerincome Ohioans.
“For my constituents, this would really hurt their family budgets,” he said. “I’m a very hard sell on this.”
Jordan Darden, 23, of Columbus’ North Side, didn’t dispute the need for more road money.
“These streets are bad; there’s nothing but potholes out here,” he said.
“At least it’s (going) toward what we need instead of something we don’t need, like the Crew Stadium thing.”
Still, Darden is concerned about the size of the proposed tax. “This is way too much money, especially when I had to pay more in my taxes this year than last year.”
In a Finance Committee hearing Thursday, Rep. Jon Cross, R-kenton, suggested that it would be more prudent to do a two-year fix — requiring ODOT to return to discuss potential options — rather than allowing the tax to increase with inflation.
“I don’t believe that fast deals are always good deals for the taxpayers,” he told Marchbanks.
Ohio’s sudden transportation-funding crisis is not really so sudden; it has just been masked over the years by the state borrowing against future gas-tax revenue and Ohio Turnpike tolls. Marchbanks has urged legislators not to approve additional borrowing, noting that debt payments are already siphoning more than $300 million per year that could be used on current projects.
Rep. Steve Hambley, R-brunswick, noted that large infrastructure projects are done in phases.
“If you get stuck in the middle … you see costs increase,” he said.
“One of the benefits of doing this longer term and taking a big bite of the apple, you have much more predictability in terms of the money coming in to fund those new expansion projects.”
Marchbanks said $750 million of the tax increase would go to the state, enough to cover what he identified as a $1 billion revenue shortfall when combined with department cost-cutting.
Counties would get $156 million, municipalities $181 million and townships $90.5 million.
The city of Columbus would take in an additional $19.3 million, bringing its total to $46 million, in 2020.
The 41 cities and townships in Franklin County would see total funding increase from $40 million to $70 million, according to an ODOT analysis.
If House Democrats agree to go along with the plan, they might seek some ways to offset the hit to lower-income families, such as making the state’s earned-income tax credit refundable.
“The governor’s proposed $2 billion tax increase
(for the biennium) is a tremendous amount of money for working people, families and seniors — people who have done everything right, but are now being asked to do even more,” said Minority Leader Emilia Sykes, D-akron.
Ohio’s gas tax is lower than that in all five surrounding states but Kentucky.
At 46 cents after the proposed increase, the tax would be higher than all but Pennsylvania’s, although it would be within 3 cents of Michigan’s and Indiana’s.
Public transit cannot get gas-tax money, per the state constitution, but Marchbanks said the budget calls for an additional $7 million per year for public transit.
“This is peanuts, to be honest, though we do appreciate the attention the General Assembly has given to transit,” said Patrick Harris, director of government affairs for COTA, the Central Ohio Transit Authority. One COTA bus costs $600,000.
W. Curtis Stitt, executive director of the Ohio Public Transit Association, told legislators that the state has cut general revenue funding for public transit by 85 percent since 2002, leaving Ohio ranked 38th in the nation in per-capita spending and 41st in overall funding.
Public-transit agencies also would be required to pay the additional gas tax. Although Dewine’s budget ensures that school districts can get refunded for the additional 18 cents, it does not do the same for transit systems or developmental disability boards.