Ohio motorists will see a 10.5-cent per gallon boost in gasoline taxes starting Monday, July 1 as the summer vacation driving season gets into full swing.
As part of the two-year transportation budget, lawmakers and Gov. Mike DeWine earlier this year agreed to increase taxes on gasoline by 10.5 cents and diesel fuel by 19 cents per gallon. Owners of hybrid and electric vehicles will have to pay additional annual fees of $100 and $200, respectively.
The increases will raise an estimated $962 million a year in money that will be split between state and local governments to pay for roads and bridges across the state.
“We are going to put quite a bit of it into our paving program,” said Montgomery County Engineer Paul Gruner. The additional money will help pave about five to 10 additional miles of two-lane roads and help cover local costs for the $20 million Third Street bridge replacement project in Dayton, he said. Some smaller bridge projects on the county’s five-year to-do list may get repaired or rehabilitated more quickly, Gruner added.
An Ohioan driving 15,000 miles a year in a car that averages 25 miles per gallon will pay an additional $63 in gas taxes.
State Rep. Niraj Antani, R-Miamisburg, voted against the tax hike. “The gas tax increase hurts everyone, costing them more when they’re trying to fill up their tank so they can get to work or take their kids to school,” he said.
“Before we asked Ohioans to dig deeper in their pockets to do much-needed road repairs, we should have looked at where we could cut costs and cut spending,” said state Rep. Kyle Koehler, R-Springfield, who voted against the tax increase. “By not addressing prevailing wage issues and tripling the funding on public transit, we simply put all the cost of road repairs on Ohio citizens at the gas pump.”
Already, some businesses are looking for ways to pass the additional tax burden on to customers.
Democrats and Republicans in the Ohio General Assembly opposed the bill
The Ohio Constitution restricts motor fuel tax revenue use to road and bridge construction and maintenance.
The DeWine administration sought an 18-cent per gallon hike that would have automatically risen with inflation.
ODOT argued that the buying power of Ohio’s 28-cent gas tax has eroded since it was last increased in 2005; people are driving more miles and more fuel efficient vehicles which means the tax is generating less money while wear and tear on roads has increased.
Deferred maintenance leads to potholes, rundown pavement, poor guardrails and other unsafe conditions.
As of last week, average gas prices in Ohio stood at $2.47 a gallon and $2.68 across the country, according to AAA.
One in three Ohioans say gas is too expensive at $2.50 a gallon, according to AAA’s annual gas price survey. In 2018, Ohio gas prices averaged $2.77 a gallon during the summer months and peaked at $2.91 a gallon on May 24, AAA reported.
Higher gas prices motivates drivers to make changes, such as driving a more fuel efficient vehicle, combining trips, reducing spending or delaying major purchases, AAA reported. For example, if gas cost $3 a gallon, half of drivers say they’d make changes and if it were $4, more than three-quarters say they’d make changes, AAA said.
Senate President Larry Obhof, R-Medina, noted that when passing the gas tax hike, lawmakers tripled the state’s earned income tax credit to save low-income taxpayers money and offset the gas tax increase.
Policy Matters Ohio, a liberal think tank based in Cleveland, argued that Ohio’s earned income tax credit should be made refundable to help more low-income people.
Refundable tax credits give families the full value of the credit, even if it exceeds their tax liability, PMO researchers say.
Since 2013, 30 states and the District of Columbia have pushed gas tax increases, including four states so far in 2019, according to the National Conference of State Legislatures.
The American Petroleum Institute’s quarterly survey of motor fuel taxes reports that the average state gas tax is 23.12 cents per gallon. When combining state, federal and other fuel taxes, Pennsylvania, California and Washington have the highest overall tax burden, API reported on April 1.
Counties, cities, villages and townships will benefit from the gas tax hike in Ohio.
In fiscal year 2020, Montgomery County will receive $25.15 million, up from $15.3 million; Miami County will get $5.85 million, up from $3.59 million; Greene County will get $8.69 million, up from $5.33 million; Warren County will receive $8.3 million, up from $4.9 million, according to the Ohio Department of Transportation estimates.
Ohio has nearly 45,000 bridges and more than 262,000 lane miles. More than 118.6 billion miles are traveled in the state each year.