September 22, 2006

Gas Tax "Buffer Zones" in Kansas?

The Kansas legislature's Joint Tax Committee is considering a proposal to create a series of gas tax "buffer zones" around the state's perimeter. The zones are intended to prevent the loss of gas tax revenue to neighboring states. Of the four states that share a border with Kansas, only Nebraska currently has a lower gas tax, allegedly prompting some motorists to cross state lines to fill up.

The proposed buffer zones would allow any gas station in a "border town" to lower their gas tax to within one cent of that of the neighboring state. Supporters of the proposal argue that it is better to gain some revenue from the reduced gas taxes in these "buffer zones" than to lose all gas tax revenue to a neighboring state.

What the proponent of this bill fail to see is that these zones will merely move the gas tax border further inside Kansas. If these buffer zones become reality, instead of having to cross the border into another state to get cheaper gas, Kansans will be able to simply drive into a border town. No one knows how many commuters currently cross state lines to save money on gas taxes, making predicting revenue gain or loss extremely difficult. Ultimately, this flawed proposal creates administrative hassles while merely shifting, not solving, the problem.

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