Increasing the motor fuel tax to fund infrastructure projects across Ohio is a matter of economic development and necessary for the state to remain competitive, witnesses told state lawmakers Wednesday.
“The approaching transportation fiscal cliff will make it impossible to deliver the infrastructure that Ohioans need and deserve,” Grace Gallucci, president of the Ohio Association of Regional Councils (OARC), told members of the Ohio Senate Transportation, Commerce and Workforce Committee.
“A cutback in transportation investment will have a negative ripple effect throughout Ohio’s communities,” added Gallucci, one of more than a dozen witnesses to testify before the committee. “The state cannot remain competitive if we do not invest enough to maintain and improve our infrastructure.”
Ohio’s gas tax stands at 28 cents per gallon, and Gov. Mike DeWine proposed increasing the fuel tax by 18 cents. However, under House Bill 62, which the state House passed earlier this month, the state would increase the motor fuel tax on gasoline by 10.7 cents per gallon and diesel fuel by 20 cents, with increased revenues split between the Ohio Department of Transportation (ODOT) and local governments.
Under the House plan, the gasoline tax would increase 7 cents in 2019 and an additionl 3.7 cents in 2020, while the diesel tax would increase by 10 cents in 2019, 6 cents in 2020, and 4 cents in 2021. Additionally, the bill proposes registration fees of $200 for electric vehicles and $100 for hybrid vehicles.
Ohio has not increased its motor fuel fee since the current rate went into effect in 2005. ODOT officials say there is no revenue for new highway improvement projects after July 1, and they plan to delay $150 million in maintenance work scheduled for Fiscal Year 2020, a move they argue will result in higher long- term costs.
Cheryl Parker, AAA regional director for public and government affairs, called on lawmakers to go a step further and index the tax to account for inflation. Parker also called for lawmakers to set a cap on annual increases.
“Indexing gas taxes for inflation is one of the most important actions that states can take to create a more stable funding source to fund infrastructure maintenance and repair, the needs that we’ll have for years to come,” Parker testified. “This will prevent us from having to come back here again and again because the needs aren’t met.”
The increase will cost the average Ohio motorists $62 to $83 per year, Parker said.
Frank Whitfield, president of the Lorain County Urban League, urged lawmakers not just to fund the maintenance of roads, but prioritize investment in public transportation.
“The cost to own, insure and maintain a car is expensive and hindering our economic growth, and for many individuals, their economic mobility,” Whitfield said. “So just fixing our roads doesn’t fix the problem.”
Ben Kessler, the mayor of Bexley, a Columbus suburb, told lawmakers, under the bill electric vehicle (EV) owners would pay more in fees than the owners of internal combustion vehicles. Kessler said the charge on EVs should be closer to $46 per year to make it in line with the tax most vehicle owners will pay.
“Let’s not assume that all EV owners are well-heeled Tesla owners and that this is simply a tax on the rich,” he said.
The Senate could vote on the bill next week. If approved as is, the increased gas taxes are expected to bring in at least an additional $872 million annually.