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Increase the Gas Tax Now (Craig Douglass On Consumers)

4 min read

Consumers in general and voters in particular understand how good roads directly impact their quality of life. Or, more to the point, they know when the condition of our roads is taking away from that quality. Consumers notice, every day, the pothole in front of a driveway, the congested two-lane road or intersection delaying a commute to work, or the bumpy, sometimes unsafe highway connecting this town to that.

Where roads are concerned, drivers are consistent complainers. “Why don’t they fix that?” is a question chock full of meaning. “Why” relates to available state and federal highway funds. “They” means the city, county or state government. “Fix” is the method by which road contractors are chosen and private-sector jobs are created to do the work. And “that” means the roads I travel. Not yours. Mine.

Just like most everything else related to services performed by government — and roads are generally accepted as the province of government responsibility — it comes down to money. Money is not the problem, however. Money is the solution. Where to get the money is the problem. And that’s where road users come in. Road-user revenue, or revenue created by user fees, including gasoline taxes, is what builds the roads we need and maintains the roads we have.

Gas taxes are the fairest, simplest way to fund good roads. But revenue from the per-gallon consumption tax is declining because vehicles are using less gas. And consumption will continue to fall as cars and trucks become ever more efficient.

Recently, the Arkansas Good Roads Foundation called for an increase in Arkansas’ motor fuel tax. The increase recommended was 10 cents per gallon for both gas and diesel. The foundation proposed the increase to provide additional revenue to the Arkansas Highway & Transportation Department and the Arkansas Highway Commission to take care of immediate needs facing the local motorists they serve. The immediate needs the AHTD cited were to restore the annual overlay-paving program, ensuring the available cash to match federal funds — you match the funds or you lose them — and to provide for critical maintenance work around the state. The amount the department is looking for quickly is $110 million.

More: Read the foundation’s full memo to the Governor’s Working Group on Highway Funding.

Other states facing the same highway-funding situation as Arkansas have recognized increased motor fuel taxes as the quickest and most equitable method to accomplish a short-term “fix” in funding, as a long-term solution to future funding is debated in Congress and in legislatures across the country.

A modest review of what other states have recently done includes the following:

  • Georgia increased gas taxes by 6 cents, plus an increase in registration fees;
  • Idaho increased gas taxes by 7 cents, plus an increase in registration fees;
  • Iowa increased gas taxes by 10 cents;
  • Nebraska increased gas taxes by 6 cents over four years;
  • South Dakota increased gas taxes by 6 cents, plus a 1 percent increase in the sales tax on motor vehicle purchases, an increase in license fees and local authority to increase vehicle and driver fees;
  • Washington increased gas taxes 11.9 cents over two years;
  • Utah increased gas taxes 5 cents at the pump, plus a 12 percent increase at the wholesale level and local authority to raise motor fuel taxes.
  • Maryland increased total motor fuel taxes to 23.5 cents in 2013, rising to 32.1 cents as of July 1; and
  • Rhode Island increased gas tax by 1 cent and will adjust the tax every two years based on inflation, with a current base of 33¢ per gallon.

If a 10-cent increase in the motor fuel tax had been put in place on Aug. 1, Arkansas motorists would still be saving, as of Sept. 1, more than 2 cents per gallon due to falling prices at the pump. If done quickly, the continuing decline in oil prices will absorb the 10-cent increase, lessening the financial impact on road-user taxpayers. The impact on better roads, however, would be significant, as the increase would raise more than $125 million annually for the AHTD, funding specific projects they would designate so Arkansans would know where the money is being spent.

Increase the gas tax. Do it now. And help create private-sector jobs to make Arkansas’ roads smoother, safer, sooner.


Craig Douglass is an advertising agency owner and marketing and research consultant. He is president of Craig Douglass Communications Inc. of Little Rock and executive director of the Arkansas Good Roads Foundation. Email him at Craig@CraigDouglass.com.
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