Editorial: Gas tax holidays are a bad idea

A recent editorial by the Elyria Chronicle-Telegram:

The answer to high fuel prices is not a gas tax holiday at either the state or federal level.

There’s no guarantee that such a holiday would drop prices at the pump dramatically. Not only that, a gas tax holiday would likely reduce the amount of money available to fix the nation’s bridges and roads, including the pothole-ridden streets of northern Ohio.

Nevertheless, there have been calls from both sides of our yawning political divide to pause gas taxes temporarily or reduce collections.

The thinking seems to be that if you cut the gas tax — 18.4 cents per gallon at the federal level and 38.5 cents per gallon in Ohio — there would be a corresponding drop in prices at the pump. That’s almost 57 cents per gallon.

We understand the allure of the idea. Not only is it an election year in which high inflation is a key issue, gas prices have been rising for months. They’ve risen even higher in recent weeks as the U.S. has levied sanctions, including a ban on Russian oil imports, over that country’s unprovoked invasion of Ukraine.

On Wednesday, the nationwide average cost of a gallon of regular unleaded was $4.305, the American Automobile Association reported. In Ohio it was $4.061.

Even before prices surged because of the war, Democrats had been eyeing a gas tax holiday. They appear to be concerned in part about the political damage high gas prices could do in the midterm elections.

A gas tax holiday theoretically could put more money in people’s pockets, but House Speaker Nancy Pelosi, D-Calif., explained earlier this month why it might not work out that way.

“There is no guarantee that the oil companies pass that reduction on to the consumer,” she said, “and it’s very hard to write a bill that requires them to pass it on to the consumer.”

Exactly. And it’s not as if oil companies have altruistically prioritized ramping up oil production to keep prices low.

As The Washington Post and Wall Street Journal have reported, some oil companies have promised to return more cash to shareholders by limiting production. They could pocket all or some of the savings from a gas tax holiday.

Then there’s the need to fix our bridges and roads.

Republicans in the Ohio Senate, including Nathan Manning of North Ridgeville, have introduced a bill that would reduce the state’s gas tax to 28 cents a gallon beginning July 1. It also would pause an extra registration fee on electric vehicles starting next year.

The argument from the bill’s primary sponsor, Steve Huffman of Tipp City, is that a 10.5-cent gas tax increase implemented in 2019 would bring in $1.5 billion over the next five years, while Ohio is expected to get $11.5 billion in from the recently passed federal infrastructure bill.

… Ohio, like the rest of the nation, has aging infrastructure, including its roads and bridges. Yes, the money from the federal gas tax goes into the nation’s Highway Trust Fund, but that gas tax hasn’t seen an increase since 1993, meaning the amount of money available hasn’t kept up with the rising cost of repairing our infrastructure.

That’s why the bipartisan infrastructure bill was so crucial.

It’s also why the General Assembly, despite grumbling from some lawmakers, agreed to raise the state’s gas tax three years ago.

… Ohio Gov. Mike DeWine said last week that he opposed rolling back the gas tax increase, as one of his primary opponents, former U.S. Rep. Jim Renacci, R-Wadsworth, has pushed for.

“We need this money to keep our roads going and repair our roads and make our roads safer,” DeWine said. “So it would just be a mistake to do that.”

Not a good political sound bite, perhaps, but it was the responsible position to take.

Elyria Chronicle-Telegram, March 15