Effective tax systems share certain traits. They combine low rates and broad bases. They minimize complexity. They also raise sufficient revenues to meet public needs. Listen to Jerry Wray, the director of the state Department of Transportation, and you cannot help but think that Ohio lacks an effective tax regimen for its roads, bridges and highways. On Tuesday, Wray pointed to a “new reality,” the state in a “dire situation” without the resources to keep pace with its transportation needs, pushing back projects decades, abandoning many on the priority list.
One of those scrapped is the proposed highway reconstruction along Interstate 76 in Akron and Barberton, long viewed as necessary. In Columbus, the second phase of work on the Interstate 70/Interstate 71 split will be put off until 2025, the final phase receiving money in 2033.
Wray pointed to “poor planning,” past administrations piling up projects knowing that the money wouldn’t be available. To be sure, that factor is part of what the department describes as the state’s “looming transportation financial crisis.” More than anything, the state doesn’t have an adequate stream of money. Wray cited $10 billion in applications from across the state, with the department currently spending $2 billion and able to devote just $100 million a year to new construction.
The director called transportation “the lifeblood of Ohio’s economy.” That suggests mobilizing to ensure a maintained and updated system. He pledged to consider “innovative and alternative funding sources.” Cover for leasing the Ohio Turnpike? Return to the idea of a vehicle miles tax, floated three years ago by a state task force?
Then, there is the old-fashioned way. The primary recommendation of the task force was a 13-cent increase in the state gasoline tax. During the past decade, Ohio raised its gas tax from 22 cents to 28 cents. Add 13 cents, and, yes, the levy would rank among the country’s highest, at sixth, in the neighborhood of Illinois, Michigan and Indiana.
States have felt the need to make such a move because the federal gas tax of 18.4 cents has not been increased since 1993. As he neared retirement from the U.S. Senate, George Voinovich made the case for a federal levy that reflects real needs, proposing a 25-cent increase, applied as an additional one penny per month. The proposal went nowhere, just as then Gov. Ted Strickland pushed aside the task force recommendation.
No doubt John Kasich, the current occupant of the governor’s office, has little interest in a higher gas tax. Yet here is an option that not only would encourage greater fuel-efficiency (part of reducing the country’s use on oil) and help meet crucial transportation priorities. It would generate economic activity, putting people to work when the jobless rate remains stubbornly high, the investment delivering an effective return.