DeWine Proposes Big Boost on Gas Tax to Fund Highway and Bridge Maintenance

click to enlarge DeWine Proposes Big Boost on Gas Tax to Fund Highway and Bridge Maintenance
State of Ohio

Ohio Gov. Mike DeWine has proposed an 18-cent boost to the state's gas tax to fund maintenance of Ohio's crumbling roads, bridges and highways — a big jump from the state's current 28-cent-per-gallon tax. If the Ohio General Assembly approves the boost, it would be the first increase in the gas tax in 14 years.

What's more, DeWine wants the tax introduced all at once on July 1. That's a departure from past state practices — usually an increase is phased in over the course of years.

The increase would raise roughly $1.2 billion a year in extra funding for the Ohio Department of Transportation to use to maintain the state's transportation infrastructure.

About $725 million of that would go toward the state's highways and bridges, while another $480 million would go to municipalities for road maintenance. That would mean about $6 million extra for the City of Cincinnati, according to ODOT data.

If you drive the state average of 13,476 miles a year and get an average of 25 miles to the gallon, you'll pay an extra $248 a year under the proposed tax increase.

DeWine says that the increase is crucial to shoring up the state's sprawling transportation infrastructure. Though Ohio has the nation's fourth-largest highway system and the second-most number of bridges, its current gas tax is lower than 28 other states'. Indiana's tax is currently 43 cents, Michigan's is 44 cents and Pennsylvania's is almost 59 cents per gallon. In the region, only Kentucky's is lower at 26 cents, but that is because the state also taxes the value of vehicles to help pay for transportation infrastructure.

Most of Ohio's neighboring states have raised their gas taxes since 2014, while Ohio has not had an increase since 2005.

On top of that, officials say, general inflation and rising construction costs more specifically have winnowed down the buying power of the taxes. DeWine's proposal would index the tax to inflation, preventing some of that erosion in the future.

Without the needed cash coming in for roads, highways and bridges, ODOT has been financing projects with debt — repayments on which will cost the department $390 million this year. That's not sustainable into the future, officials say, citing a coming $1 billion shortfall for ODOT.

The tax increase would keep the state from having to borrow $240 million over the next two years, ODOT Director Jack Marchbanks told the Ohio House Finance Committee, and would increase the amount of federal matching grants the state would be eligible for.

"You have to have a gas tax increase, there’s no doubt,” DeWine told reporters in Columbus Wednesday. “The day of reckoning is finally here and we have an obligation to face that.”

The General Assembly must approve the tax increase. A number of Republican lawmakers agree with DeWine that the tax is necessary, while some Democrats like Cincinnati's State. Rep. Brigid Kelly are skeptical, pointing out that sales taxes are regressive and impact low-income residents the most. And, as many have noted, nothing from the hike would go toward public transit, which is in dire need of funding across the state.
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