May 21, 2007

Gas Tax Gimmicks

It's the start of the summer driving season, and gas taxes are back in the news again across the nation. Gas taxes have long been the main method used by states to fund their transportation system, but recent high gas prices have made gas taxes a hot political issue. The problem arises because most states' gas taxes are fixed dollar values, bringing in the same amount of revenue regardless of the sale price of gas. Every year, inflation decreases the value of the revenue these taxes bring in, forcing lawmakers to pass new laws raising the gas tax every few years. However, this time around, many states just can't seem to find the political will to do so.

Nebraska's Governor Heineman is threatening to veto the paltry 1.8 cents per gallon gas tax increase passed by the state's legislature as part of the biannual budget, designed to shore up declining revenues. Minnesota's Governor Pawlenty waited less than twenty-four hours to veto an equally modest five cent per gallon gas tax increase, calling the move ""untimely and misguided". That's an interesting turn of phrase--Governor Pawlenty thinks that raising the gas tax, even to keep up with inflation, is "misguided" during a time of higher gas prices. Pawlenty claims to be fighting the gas tax increase to help the taxpaying drivers-- but what word other than "misguided" describes the idea that we can best assist drivers by refusing to provide money to repair damaged roads?

Even worse, lawmakers in Connecticut and Minnesota have proposed completely suspending their state's gas taxes, for the summer and for one year respectively. It is bad enough to allow transportation revenues to shrink under inflation, now some lawmakers want to suspend collections of the one tax that provides virtually all the funding for transportation in these states. While in the short term these gas tax gimmicks may pay political dividends, in the not-so-long term these states cannot afford to play politics with transportation funding.


Post a Comment

<< Home