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Proposed bill would reduce gas tax, eliminate special registration fees for hybrid/electric vehicles

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Posted at 12:15 PM, Mar 08, 2022
and last updated 2022-03-08 12:41:19-05

CLEVELAND — New legislation seeks to cut Ohio’s gas tax and eliminate fees on hybrid and electric vehicles in the Buckeye State.

Republican Sen. Steve Huffman is sponsoring a bill that would reduce the state motor fuel tax by 10 cents to 28 cents a gallon for regular gasoline.

Senate Bill 277 would also eliminate special registration fees paid by owners of hybrid and electric vehicles for the next five years. Currently, drivers pay $100 for hybrids and $200 for electric vehicles.

“Now is a time for dramatic policy shift. That's the way to change this situation,” said Mike Chadsey, PR Director for the Ohio Oil and Gas Association. “The key factor in the price of the pump is the price of a barrel of crude oil. A big part of that is the refining cost. A big part of that is the transportation costs.”

But simply eliminating the gas tax may not be so simple. The Ohio Department of Transportation says slashing the gas tax would have a $4 billion impact on revenue, which is money used to pay for road and bridge maintenance as well as construction projects.

“Then you’d have a situation where that money goes to fund roads and bridges and those types of things. So, if you are solving a problem today, are you creating one down the road?” Chadsey said.

Ohio hiked its gas tax in 2019, but state officials say projected revenues are failing to meet expectations. Ohioans have driven fewer miles during the COVID-19 pandemic, which means less revenue created by the gas tax. State officials say that’s created a shortfall of $464 million.

“When energy costs go up, every other product goes up. Because it takes more to haul, it takes more to deliver,” Chadsey said. “That's also your grocery. That's also your clothes. That's also traveling for vacation.”

Prior to 2019, the state’s gas tax had been left untouched for years. Currently, Ohio ranks 14th in the country for highest regular gasoline tax rates, and ninth for diesel.

“There are a wide variety of reasons why one price would be different from across the street or down the road or another town,” Chadsey said. “A lot of that has to do with the independents that owned and run these gas stations.”

Governor Mike DeWine’s office is reviewing the bill, which had its first hearing last week.

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