The push for a gas tax hike is already building in the new year, threatening to drive up the cost of everyday life for Ohioans.
The state’s infrastructure projects budget is running low on cash as $1.5 billion in turnpike bond funding, approved in 2013, has run out.
New Governor Mike DeWine is facing pressure from a group called Fix Our Roads (FOR) Ohio. Their main proposal? Increase the cost of living for the people and businesses of the Buckeye State by raising the gas tax.
However, not only is this policy damaging to taxpayers, it may fail to provide the expected revenues.
Evidence suggests that revenue generated by gas tax hikes fail to address shortfalls in state budgets. The Center on Budget and Policy Priorities has found that various state sales tax hikes from the early 2000s did little to help falling state revenue numbers. Among these was Ohio’s 2003 gas tax increase. As such, Ohio has not seen a change to its gas tax since 2003, and to alter that trend now would be harmful to Ohioans.
The gas tax – as with all sales taxes – is regressive by nature. Coupled with gas tax prices that have been creeping up in Ohio, such a tax hike would have especially adverse effects on the state’s lower income earners. Additionally, Strategas Research Partners report a gas tax hike would serve to eliminate 60% or more of the benefits individuals saw from federal tax reform depending on the size of the hike
Unfortunately, Governor DeWine has not rejected the idea out-right. The Governor promised stakeholders a blue ribbon task force to determine the best way to fund infrastructure improvements during his 2018 campaign, saying he’d be open to the suggestion of a gas tax hike should that be recommended.
Ohio and Ohioans have reaped the rewards of common sense tax policy and federal tax reform; the Buckeye State saw a quite sizable budget surplus in 2018, $657 million of which was used to top off the state’s rainy day fund, and the average Ohioan has seen an increase in their take-home pay. Governor DeWine and the Ohio Legislature need to protect this progress and find alternatives to address budget challenges that do not burden Ohio’s taxpayers.