Ohio drivers will pay more at the pump this summer if the legislature approves a $1.2 billion gas tax increase recommended Thursday by Gov. Mike DeWine.
DeWine is seeking an 18 cent-per-gallon increase in his $7.4 billion two-year transportation budget, which was presented to lawmakers Thursday morning. That would kick gas tax from 28 cents per gallon to 46 cents and would raise an estimated $1.2 billion a year for the state’s pothole-pocked roads and deteriorating bridges, including $480 million for local government projects.
The tax hike would take effect July 1 and increase with inflation each year starting in July 2020. A 46-cent state gas tax would be the fifth highest in the country.
It’s now up to the Ohio General Assembly to decide whether to raise the tax and by how much. The transportation budget bill must be signed into law by March 31.
The tax increase would be the first in 13 years and put Ohio within a few cents of most of its neighbors. It would go up over time, which Ohio Department of Transportation Director Jack Marchbanks said is crucial to ensure officials aren’t back asking for more money in a few years.
“The 18 cents is what we see as filling the hole, meeting the need,” Marchbanks told lawmakers Thursday. “The aspect of the ask is not, we believe, rushed.”
Why does DeWine want to raise the gas tax?
The Ohio Department of Transportation is facing a $1 billion shortfall for road and bridge maintenance and construction by 2030.
Here’s how that breaks down:
- $250 million for major new construction projects,
- $250 million to expand safety initiatives and reduce crashes and
- $500 million for maintenance.
Without an increase, Marchbanks said, there is no money for new construction projects such as future phases of the I-75 expansion and reconstruction in Cincinnati.
There are questions about whether part of the funding shortfall stems from poor decision making in the past, such as borrowing money and pursuing new-road projects instead of prioritizing maintenance.
With 11.7 million people, Ohio ranks seventh in population among U.S. states. Yet, it has the fourth largest interstate system in the country, the second largest inventory of bridges and the sixth highest number of vehicle miles traveled.
Marchbanks said funding has been an issue for years, but Gov. John Kasich’s administration chose to bond projects. The agency’s debt payments average $330 million a year.
More debt wasn’t an option for DeWine. Earlier this month, a panel convened by DeWine recommended raising the motor fuel “user fee” after taking testimony for just two days. DeWine also did not recommend a new fee on electric, hybrid or alternative fuel vehicles, which state officials estimated would raise only $2.5 million a year.
“You have to have a gas tax increase, there’s no doubt,” DeWine told reporters Tuesday.
While running for governor last year, DeWine, a Republican, promised no new taxes if elected. He accused his opponent, Democrat Rich Cordray, of wanting a $4 billion tax increase. Cordray’s plan to fix Ohio roads? A multi-billion dollar infrastructure bond package.
How much would the tax cost you?
The gas tax is a per-gallon fee drivers pay every time they buy gas. In Ohio, it’s 28 cents per gallon, a rate that has been flat since 2005 and is lower than all its neighbors except Kentucky. Gas tax revenues must be used for highway transportation, according to the state constitution – 60 percent goes to state projects and 40 percent goes to local government projects.
What do lawmakers think?
It’s not yet clear how far DeWine’s proposal will go in the GOP-controlled General Assembly, a body that has championed myriad tax cuts in the past eight years.
Lawmakers questioned the size of the increase and suggested a short-term fix while looking for other revenue streams. Marchbanks said the agency has to have all the money for a project before it makes it available for bidding.
Rep. Brigid Kelly, a Hyde Park Democrat, said $1.61 or $2.65 more a week might not sound like a lot, but it could be a problem for Ohioans making minimum wage.
House Speaker Larry Householder said Wednesday DeWine’s administration has made a good case for more funding. The last gas tax increase was passed during Householder’s first term as House speaker.
Senate President Larry Obhof has said he’s cautious about increasing any tax and said he wants to spend some time examining the scope of the transportation funding problem.
What else is in the transportation budget?
The transportation budget includes $7 million a year for public transit with federal flex dollars. That’s far less than the $150 million sought by a group of more than 35 transit groups to improve public transportation and walking and biking infrastructure.
The bill would also expand variable speed limits statewide for construction and bad weather. The last transportation budget tested them out on I-670 east of Columbus, and Marchbanks said the experiment has worked well.