The Ohio gas tax increased by 10.5 cents per gallon Monday, raising the total gas tax burden at the pump to a whopping 38.5 cents per gallon. This is especially bad timing for consumers to handle a gas tax hike as the price at the pump is expected to hit $3-per-gallon this year in Ohio.
Lawmakers once again used “infrastructure” as an excuse to take raise taxes, and taxpayers across the state will begin feeling the effects of these harmful tax hikes next week.
Approved in March by state lawmakers as a part of the state’s transportation budget, this regressive tax hike will hit low-income taxpayers in the Buckeye state the hardest. Low-income households spend a larger percentage of their take-home pay on gasoline than those with higher incomes.
While the revenue will be used to pay for infrastructure across the state, the House made sure mass transit got money as well.
Gas tax hikes drive up the cost of living for everyone, making Ohio a more expensive place to live and to do business.
Pictured below is Ohio’s state gas tax compared to neighboring states. Map courtesy of Cincinnati Enquirer.
The tax also hits rural drivers who use more gas to drive greater distances, but do so on roads that are more affordable to repair. Their gas tax money goes off to the other side of the state to fund repairs on more expensive roads and bridges. That is why the gas tax is not a “user fee”. If it were, it would be doing a better job of keeping up with the costs it is supposed to cover. Instead, the gas tax covered only 43 percent of total spending on state and local roads.
Another problem with the gas tax: revenues are unlikely to live up to the hype. The 2003 gas tax increase, which was just 6 cents, failed to bring in the promised revenue. Now, with electric vehicle use having jumped 54 percent from 2016 to 2017 alone, the situation is even more difficult.
The gas tax will even undermine Trump tax reform. A Strategas Partners analysis found a gas tax hike of 25-cents (along with rising gas prices) would eliminate up to 60 percent of the savings taxpayers saw from the 2016 federal tax reform bill. The Ohio increase is not as bad, but still is chipping away at a significant percentage of money that federal tax reform put back in peoples’ pockets.
Rather than asking the hardworking taxpayers across Ohio to hand over even more of their income at the pump, lawmakers should stop using “infrastructure” as justification to hike taxes, and find ways to use existing revenue more efficiently.