Home Gas effect Cutting gas tax in Ohio would be a mistake

Cutting gas tax in Ohio would be a mistake

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A group of economists overwhelmingly thinks that a proposal to cut Ohio’s gas tax is a bad idea, both because it will sap state funds for infrastructure and because it will remove incentives to save energy.

In 2019, Governor Mike DeWine lobbied for a 25-cent-per-gallon statewide gasoline tax hike and got some of what he wanted – a 10.5 cent increase which took effect in July of this year.

Now, DeWine’s Republican colleague, Sen. Stephen Huffman, R-Tipp City, is proposing to suspend the increase for five years. He is signed up 15 Republican co-sponsors for legislation, Senate Bill 277.

Passing the bill would be a step in the wrong direction, the vast majority of a panel of 32 economists said in a survey published last week by Scioto Analysis.

They were asked if they agreed that “decreasing state highway spending for the next five years by repealing state gasoline tax increases would create economic benefits that would outweigh the economic costs of the policy.

Fifteen economists said they strongly disagreed, 11 disagreed and four said they were unsure. Only two agreed with the proposal, but neither gave an explanation in the comments section of the survey.

Some commenting economists pointed to a simple trade-off: Motorists can either pay higher gas taxes to help the state maintain the roads, or pay more at the repair shop after driving on dirt roads. Fuck.

“This proposal simply shifts the burden; while motorists save pennies at the pump, dollars will be spent on accelerated vehicle depreciation and in repair shops during the five-plus years of highway maintenance neglect,” independent economist Key. E. Strong wrote. “The trucking industry with heavy vehicles decimating the road will reap the savings and cushion its bottom line at the expense of passenger vehicle drivers.”

However, an economist who was unsure of the proposed tax break said some maintenance costs would be covered by the government’s revenue. bipartite infrastructure package which President Joe Biden signed late last year.

“Spending from the 2021 federal infrastructure package (Infrastructure Investment and Jobs Act) will at least partially offset the spending cuts,” said Thomas Traynor of Wright State University. “I would need more specific information to be able to answer the question, and that is not yet available.”

Cort Rodet of Ohio University has written that gasoline taxes are not only an effective way to get people who use roads to contribute to their maintenance, they are also a tool to deal with the existential threat of climate change.

The research “shows (gasoline taxes) are a better way to solve climate problems than fuel standards,” Rodet wrote. “Furthermore, I doubt that the benefit to individual households from freezing tax increases is substantial. gas tax bill totals $336 per year per household, or about 0.5% of the average Ohio household income Stopping the increases won’t do much for the average household, so that this could mean that roads and improvements will be abandoned.”


This story was republished from Ohio Capital Journal under Creative Commons license.