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Terra Goodnight · February 14, 2019

Points to Consider In the Gas Tax Debate

The DeWine administration has raised the alarm about a looming structural deficit in Ohio’s transportation budget. By March 31, lawmakers must enact a two-year transportation budget, which could include new revenue to address the budget gap. Many are calling for a gas tax increase to make up for some or all of the shortfall. Before any solutions are enacted, it’s important for advocates to understand how Ohio currently pays for its transportation infrastructure at the state level so we may seek a solution that balances the needs of the system, its users and taxpayers.

What Progressives Should Know

  • Ohio’s Gas tax – a flat 28-cents per gallon – is low compared to our neighboring states, has not increased since 2005, and is not indexed for inflation.
  • While the miles Ohio drivers travel each year steadily increases, gas tax revenues are flat thanks to lower fuel consumption.
  • Ohio’s gas tax is shared with local governments according to a formula. A 1 cent increase in the state gas tax would generate around $43 million in additional revenue for ODOT, and $24 million to be divided up among counties, townships, cities and villages. 
  • Ohio is 11th in mass transit usage but 45th in state support, spending just $.67 per capita compared to $9 in Michigan and $86 in Pennsylvania. ODOT has estimated the state needs to be spending about $150 million per year on transit. The last state budget spent just $39.5 million on transit, $80 million below what the state itself says is needed.
  • Article XII of the Ohio Constitution limits the expenditure of gas tax revenue to the state’s highway and bridges – pedestrian, bike and transit infrastructure are unlikely to directly benefit from any increase that is passed.
  • The gas tax is regressive, meaning that low income people pay more taxes as a share of their income than people who earn more.

What Progressives should demand

  • A balanced solution that looks at a range of revenue sources to fix our immediate needs, and a commitment to look longer-term at the state’s transportation future with an eye toward a future less dependent on gas taxes
  • Incentives that decrease, not increase, the consumption of polluting fossil fuels
  • A multi-modal approach to moving people and goods that recognizes that transit, rail, air, bike and pedestrian infrastructure can all work to reduce congestion on our roadways
  • A less regressive tax system in which the system is funded by users according to both their system use and ability to pay
  • A commitment by state leaders to aggressively lobby the federal government to address the shortfall in the federal highway trust fund.
To keep up with the debate on Ohio’s transportation budget, follow us on Twitter and sign up for our weekly legislative newsletter.

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Tagged in these Policy Areas: Ohio State Budget | Statehouse Update