Ohio drivers will pay an additional tax of 10.5-cents per gallon of gas and 19-cents per gallon of diesel, beginning July 1, under a transportation budget signed Wednesday night by Gov. Mike DeWine.
“This was a job that no one relished,” DeWine said Tuesday at a press conference with legislative leaders. “This was something that, frankly, had to be done if this state is going to move forward and we were going to keep our families safe.”
The additional gasoline tax is expected to cost a motorist who drives 15,000 miles a year and gets 25 miles per gallon an extra $63 per year.
Overall the gas and diesel tax hikes are expected to raise $865 million a year in additional revenue, which will be split 55/45 between state and local government.
“The state made a case that between $500 million and $550 million was what they needed in the first year and this reaches that goal and it provided a lot of critical money needed by the locals as well,” said House Speaker Larry Householder, R-Glenford.
“Our roads will be fixed, our bridges will be safe,” said Senate Finance Committee Chairman Matt Dolan, R-Chagrin Falls.
Business groups including the Ohio Chamber of Commerce argued against having different tax rates for gasoline and diesel. Householder said the higher diesel tax was a way to capture money from truckers that pass through and use Ohio roads.
The House voted 70-27 and the Senate voted 22-10 in favor of the final deal.
Lawmakers rejected a request by DeWine to index the gas tax to inflation, allowing it to climb each year without legislative approval.
The state gas tax, which is currently 28-cents per gallon, was last increased in 2005. Each penny raises about $66 million a year for the Ohio Department of Transportation. The Ohio Constitution mandates that motor fuel tax revenue only be used on maintenance and construction of roads and bridges.
The buying power of the tax has been eroded by inflation; Ohioans are driving more miles, putting more wear and tear on roads, but cars are more fuel efficient so less gas tax revenue is coming in per mile driven.
Electric, hybrid drivers to pay higher fees
The agreement would also charge electric vehicle owners $200 a year and plug-in hybrid owners $100 a year as an extra registration fee.
Clean Fuels Ohio Executive Director Sam Spofforth said the fees on electric vehicles and plug-in hybrids amount to an unfair tax that will kill jobs and innovation in Ohio.
Former governor John Kasich opted to issue $1.5 billion in bonds against future tolls collected by the Ohio Turnpike Commission to generate cash for construction projects. But that money, which started flowing in 2014, runs out later this year.
Ohio gas tax still lower than most in region
Ohio’s gas tax is lower than neighboring states, except for Kentucky where it’s 26 cents per gallon, according to the American Petroleum Institute. The gas tax is 58.7 cents in Pennsylvania, 44.1 cents in Michigan, 42.9 cents in Indiana and 35.7 cents in West Virginia.
The federal gas tax, unchanged since 1993, is 18.4 cents per gallon.
Increasing Ohio’s gas tax is supported by a long list of business, local government and transit groups.
Lawmakers battled for weeks over the gas tax increase. Cedarville University political scientist Mark Caleb Smith said voting for a tax increase puts incumbent lawmakers at risk when it comes to re-election time, particularly in GOP primaries.
“Taxes are easy to explain and use as an issue against such incumbents. It is also an easy way to connect them to liberal and progressive beliefs. In the end, it is risky for many Republicans to be attached to tax increases,” he said.
How our local lawmakers voted
Voting against the transportation budget: state representatives Niraj Antani, John Becker, Bill Dean, Candice Keller, Kyle Koehler, Jena Powell, J. Todd Smith, Fred Strahorn, Nino Vitale and state senator Steve Huffman.
Voting in favor of the transportation budget: representatives Jim Butler, Sara Carruthers, George Lang, Scott Lipps, Susan Manchester, Rick Perales, Phil Plummer, and Paul Zeltwanger and state senators Bill Coley, Bob Hackett, Peggy Lehner and Steve Wilson.