CLEVELAND — Facing a $1 billion shortfall in funding for new highway projects and maintenance, Ohio state leaders are considering the first hike in the state’s gas tax in more than a decade. Currently at 28 cents per gallon, Ohio’s gas tax rate is in the middle of the pack nationwide and the cheapest among all Great Lakes states.
On Wednesday, a study committee formed by Gov. Mike DeWine came to a general consensus that a gas tax hike may be necessary to offset shortfalls in funding for state road maintenance and infrastructure projects. Transportation Director Jack Marchbanks said an “impending crisis” may be near if more tax revenues aren’t collected.
In 2013, then Gov. John Kasich cobbled together a short-term fix to infrastructure funding shortfalls by borrowing $1.5 billion against future revenues from turnpike tolls. That money, however, has already been allocated or spent.
Over the years, gas tax revenues have been slowly undercut by more fuel-efficient vehicles, hybrids and rising inflation. With less money to go around, as many as 20 major road projects across the state could be put on hold, state officials said.
For many drivers in Northeast Ohio, a hike in the state’s gas tax is a hard sell.
“We don’t need any more taxes. We’re paying enough now. With a child and people who are on a regular income, we can’t afford it now,” said Carolyn Demming of Parma. “We have to use coupons and everything else to get by. That will really hurt us, especially if we’re on a limited income.”
According to the American Petroleum Institute, Ohio ranks 29th in terms of gas tax rates as of July 2018. Even if Ohio were to double its gas tax rate to 56 cents per gallon, the state would still have a lower gas tax rate than neighboring Pennsylvania, which has the highest rate in the United States at 58.7 cents per gallon.
Marchbanks told committee members that if Ohio does not generate more revenue for road projects, drivers across the state can expect to experience more congestion and rougher roads. Currently, the state spends 90 percent of its gas tax revenues on maintenance, Marchbanks said.
Drivers like Ira Bellamy believe the state could find other ways to save money instead of burdening the taxpayers even more, he said.
“I think it’s a terrible idea. We’re already paying too much. We’re being taxed already way too much,” Bellamy said. “I’m totally against it.”
For the average driver who logs 13,000 miles per year with a vehicle that gets 20 miles per gallon that driver pays, on average, $182 per year in gas taxes. If, for example, the gas tax is raised to 40 cents per gallon that same driver would pay $260 per year in gas taxes.
State officials said that raising the gas tax by a single penny would generate more than $60 million in revenue annually. However, drivers told News 5 that if the gas tax were to be increased, their spending on other items would decrease, potentially generating less sales tax revenue.
“I’m retired. There are a lot of people who can’t afford to keep paying and paying [more taxes]. Heck, I don’t even have medical (insurance) right now. It’s just getting outrageous,” Bellamy said.
Compounding the potential increase in the gas tax is increasing property tax rates and school levies, Demming said.
“School taxes are going up. Our taxes went up this year on the house,” Demming said. “They are taxing us to death.”