COLUMBUS — Several members of an advisory panel formed by Gov. Mike DeWine said Wednesday the state’s gas tax needs to be increased.
That was one of the few points on which there was largely consensus among members of the Governor’s Advisory Committee on Transportation Infrastructure.
After two days of hearings, the group’s recommendations will be compiled into a report that will be released ahead of the upcoming transportation budget, according to Brenton Temple, director of intergovernmental affairs in the governor’s office.
While the panel appears to largely be in consensus that a gas tax increase is needed to address a major revenue shortfall for transportation infrastructure projects, no specific recommendation on the size of the increase was made.
However, some members did offer their own thoughts, including Dean Ringle, executive director of the County Engineers Association of Ohio. He suggested the state needs to boost revenue for state projects by $1 billion and put another $1.5 billion into the coffers of local governments, although he said that not all should come from a gas tax increase.
His suggestion came on the heels of Doug Sibila, president and CEO of Peoples Services, saying the gas tax rate should be increased by as much as 25 cents per gallon to generate $1 billion, about $550 million of which would be made available to local governments.
Sibila also said the gas tax needs to be indexed to inflation. Others, like Richard Dalton, business manager at the International Union of Operating Engineers, Local 18, agreed. But he also said the state needs to capture revenue from alternative fuel vehicles.
That suggestion, though, was met with skepticism by some members of the panel who said they fear excessive fees could discourage the purchase of such vehicles.
“I question if that’s a good wisdom,” said Ed Harmon, chairman and president of NAI Harmon Group, in response to calls for fees on such vehicles. Marcus Hanna, CFO at Castellini Management, noted that ODOT Director Jack Marchbanks said the department explored a $250 fee for electric vehicles and a $75 fee for hybrids. However, that would generate just $2.5 million annually.
He questioned how much of that revenue would be consumed by administrative costs.
Nicole Busey, a tax director at Marathon Petroleum, said any indexed gas tax increase should be subject to legislative review after a period of time. She also warned that it would be the only tax in Ohio to be indexed. To help local governments, she suggested lawmakers increase caps on permissive fees.
Jim Aslanides, a former state lawmaker and president of the Ohio Oil & Gas Association, said another potential source of revenue could come from the state’s leasing land it owns for oil and gas development. A similar proposal in Pennsylvania generated $420 million in its first year and $100 million annually since.
The panel also discussed the possibility of increasing or implementing tolls on certain roads, although several criticized the idea.
The recommendations came after the panel fielded two hours of public testimony and once again heard from Marchbanks.
The director, testifying for the second consecutive day, largely took questions from the panel, including on the extent of the shortfall ODOT faces.
Marchbanks said the annual shortfall is $1 billion, and that it would take five to seven years to catch up on deferred maintenance if the state had all the money that it needed.
“We’re looking at a generational improvement here,” he said.
During public testimony, many witnesses urged the panel to recommend increasing the 28 cents-per-gallon motor vehicle fuel tax.
Marchbanks said Tuesday that each 1 cent increase in the rate would raise about $67 million a year.
Delaware County Engineer Chris Bauserman called for the rate to be increased and indexed for inflation. He also urged the panel to think of the gas tax as akin to fees for the use of water or sewer service.
“The gas tax that we currently have is a user fee,” he said. “It’s unfortunate we call it a tax.”
Asked specifically how he would index the tax, Bauserman said other states have used a construction price index model.
Ringle asked about the statewide perspective on the transportation infrastructure needs of counties.
Bauserman said the needs amount to about $1.12 billion annually. Yet, the gas tax revenue funneled to counties each year totals just $450 million.
Tom Balzer, president and CEO of the Ohio Trucking Association, said the average Ohioan pays just $11.41 per month in the fuel tax.
“My Netflix bill was more than that this month,” he said, adding that the average gas tax rate in surrounding states is $41.48.
Jon Honeck, senior policy advisor for the County Commissioners Association of Ohio, said permissive license fees brought $103.2 million in for counties across the state, although he added that the money does not go a long way in less populous counties.
“From a county perspective, there is simply no substitute for a strong state financial partnership to address the needs of our transportation infrastructure,” he said.
Christine Matacic, a trustee in Butler County’s Liberty Township, proposed a transportation improvement rating exchange, which she said would capture the estimated amount of fuel tax not paid by drivers of alternative fuel vehicles.
Asked about a potential gas tax increase, she said she would prefer to go other routes to generate needed revenue.
Other witnesses spoke of the need for additional funding for mass transit, including Jason Warner, manager of government affairs at the Greater Ohio Policy Center. He said such an investment will ease pressure on state roadways.
Stu Nicholson, public affairs director at All Aboard Ohio, lamented the lack of public transit advocates on the panel. However, Akron Mayor Dan Horrigan assured him that the views of public transit advocates are represented.
The panel also received testimony from the American Council of Engineering Companies of Ohio; the American Petroleum Institute Ohio; the Ohio Aviation Association; Gallia County Engineer Brett Boothe; the Great Lakes Construction Co.; Middletown Mayor Larry Mulligan; Lakewood Mayor Mike Summers; the Mid-Ohio Regional Planning Commission; Move Ohio Forward; the Ohio Association of Regional Councils; the Ohio Fire Chiefs Association; the Ohio Township Association; the Ohio Municipal League; and the Cleveland NAACP. Both Speaker Larry Householder (R-Glenford) and Senate President Larry Obhof (R-Medina) were coy Wednesday about the possibility of a gas tax increase.
“I told the governor that we would be willing to keep our powder dry and hear them out and listen to what the facts are and make decisions,” Householder said.
He said he doesn’t have a date in mind by which to pass the transportation budget so the Senate can begin its review, but that he’s not worried about the potentially tight timeline.
Obhof promised “full and fair hearings” of the issues in the upper chamber.
“As a general proposition, I would say that most people in this chamber that I have served with, we have been in favor of decreasing the tax burden,” he added.
He said one or more Senate committees likely will extend invitations to testify to witnesses who appeared before the governor’s advisory committee. However, he declined to paint the situation in the same stark terms as others have.
“I think there’s a legislative process that we’ll go through over the next two months and members of the Senate will decide for themselves what they think the facts are,” he said.
