Policymakers should increase the motor fuel tax to maintain and improve Ohio’s transportation system, the Governor’s Advisory Committee on Transportation recommended during its second and final meeting Wednesday.

Most members also agreed that the motor fuel tax should be indexed to account for inflation, but said it should both be capped to avoid “major spikes” in the gas tax and subjected to periodic review by the General Assembly. Members also agreed that other revenue streams should be considered, but didn’t agree on whether the state should immediately implement new taxes on electric vehicles and hybrid vehicles to help pay for the infrastructure they use. Other revenue options include allowing municipalities and townships to increase licensing and registration fees, as the General Assembly recently allowed counties to do. Other options for consideration included taxing based on vehicle miles traveled, taxing based on personal miles traveled and adding tolls in some circumstances.

Prior to the discussion among members, the committee listened to two hours of public testimony from a variety of organizations, most of which urged the panel to recommend an increase to the motor fuel tax. No organization representatives said they were opposed to such an increase.

The committee also heard once again from Ohio Department of Transportation (ODOT) Director Jack Marchbanks, who expanded on his testimony from Tuesday. (See The Hannah Report, 2/5/19.)

Marchbanks told County Engineers Association of Ohio (CEAO) Executive Director Dean Ringle that the $1 billion “hole” he described on Tuesday is an annual shortfall for ODOT that doesn’t include local shortfalls. Later in the meeting, Ringle said local government shortfalls are between $1 billion and $1.5 billion annually, meaning the state likely needs to raise around $2.5 billion more annually to keep up with state and local transportation system maintenance.

In response to another question, Marchbanks said Ohio currently gets back 91.5 cents for every tax dollar it sends to the federal government.

Brenton Temple, director of intergovernmental affairs for Gov. Mike DeWine’s office, told reporters following the meeting that administration staff will write a report based on the committee’s two meetings and submit it to members for their signatures.

“The committee has given its ‘broad-strokes’ input as to what they believe the appropriate steps are,” Temple said, noting that’s exactly what committee members were asked to do. “It sounds like they believe that the gas tax should be raised. Now, it might be left to the General Assembly to come up with a specific number as the budget is drafted.”

Temple said it was too early to say whether the DeWine administration will propose a motor fuel tax increase at all, let alone if it will put forward a specific number.

“I told the governor that we will be willing to keep our powder dry and hear them out and listen to what the facts are and make decisions,” House Speaker Larry Householder (R-Glenford) told reporters following Wednesday’s session. “I think the important thing is that we listen to what the governor’s commission has to say and what they think some solutions might be, what the problems are, and then we will go from there.”

Ohio’s current motor fuel tax rate is 28 cents, which ranks 29th in the nation, George Palko of the Ohio Contractors Association (OCA) told the committee.

“This is Ohio’s primary source for highway construction revenue, yet we rank in the lower 40th percentile. How do we maintain and improve this state’s biggest asset for economic growth when the impact of the state’s primary funding source remains stagnant as its impact falls every year due to inflation?” Palko said, noting Ohio’s neighbors have recently increased their motor fuel tax rates. He said Michigan’s is 44.1 cents, Indiana’s is 42.9 cents, Pennsylvania’s is 58.7 cents and West Virginia’s is 35.7 cents.

“All of the Great Lakes states, with the exception of Ohio, have increased their state gas tax in the past few years. Why have they done this? Every indication is that the future federal highway bill and future federal infrastructure bill will put more onus on each state to fund a much larger portion of projects than they are today,” Palko said.

Delaware County Engineer Chris Bauserman, representing the CEAO, said Ohio is ranked 35th in geographic size, but has the fourth largest interstate network in the U.S.

“With fuel-efficient vehicles and inflation on the rise, the state and federal gas tax contributes to a shrinking share of Ohio’s transportation spending. Counties across Ohio face a similar situation,” he said. “Counties cannot keep up with the increasing costs of transportation improvements.”

Bauserman said the most common funding mechanisms used by states are motor fuel tax increases, public-private partnerships, tolling, state and local sales taxes, local levies, vehicle registration fees and express lane programs. He added that 10 states have approved new fees for electric and/or hybrid vehicles, and that three states are testing mileage-based user fees.

The committee also received testimony from Middletown Mayor Lawrence Mulligan, speaking on behalf of the Ohio Mayors Alliance; Jason Warner, manager of government affairs for the Greater Ohio Policy Center; Steve Bergman, representing the American Council of Engineering Companies; Stu Nicholson, public affairs director for All Aboard Ohio; Chris Zeigler, executive director of the Ohio office of the American Petroleum Institute; Stacey Heaton, executive director of the Ohio Aviation Association; Gallia County Engineer Brett Boothe; Jon Honeck, senior policy analyst with the County Commissioners Association of Ohio; Christine Matacic, trustee for Liberty Township in Butler County; Jeff Sleasman, director of strategic partnerships for Compass Biomedical; Lakewood Mayor Mike Summers; William Murdock, executive director of the Mid-Ohio Regional Planning Commission, representing the Ohio Association of Regional Councils; Chris Stocking, chair of Clevelanders for Public Transit; Jonathan Westendorf, first vice president of the Ohio Fire Chiefs’ Association; Connie Fink, president of the Ohio Township Association; Kent Scarrett, executive director of the Ohio Municipal League; Tom Balzer, president and CEO of the Ohio Trucking Association; William Tarter, second vice president of the Cleveland branch of the NAACP; and Central Ohio Transit Authority President and CEO Joanna Pinkerton.

Written testimony can be found at www.hannah.com>Important New Documents and Notices>Task Forces and Study Committees.