Gas Tax Hike will Fund Infrastructure Work

In early April, Ohio Gov. Mike DeWine signed House Bill 62, a two-year transportation-funding bill, which included language to raise the gas and diesel tax, create a new electric and hybrid vehicle tax and make the front license plate on motor vehicles optional.

The legislation will go into effect in July, as gasoline will increase by 10.5 cents a gallon and the tax on diesel fuel will go up 19 cents. H.B. 62 will create $865 million a year in new tax revenue, with about 55 percent going to the state and about 45 percent going to local governments.

This new money will create Prevailing Wage jobs in the building trades, as workers will be needed for road and bridge maintenance, safety upgrades and new major construction projects.

Besides the gas tax, the bill requires owners of electric and plug-in hybrid cars to pay yearly fees. There will be a $200 tax each year on electric vehicles and a $100 yearly tax for  plug-in hybrid vehicles.

Hybrid and electric vehicles have contributed to the decline in gas tax revenue, as owners use little to no gas, yet still contribute to the wear and tear of Ohio roads and bridges. In general, more fuel-efficient cars and trucks have also led to a decrease in revenue from the gas tax, which was last raised 14 years ago.

Additional language within the bill contains a formula to convert compressed-natural gas to gallons, and owners of CNG cars will have to pay a tax on this fuel, which will be phased-in over the next five years.

On July 1, 2020, a front license plate will no longer be required, but those who want a front license plate can request them. The bill also limits the use of traffic cameras by local governments to catch speeders or drivers going through red lights.

DeWine initially proposed increasing the gas tax by 18 cents, from 29 cents to 47 cents, citing information from the Ohio Department of Transportation, who claims it needs roughly $1 billion per year, over the next 10 years, to fill the gap in their construction funds.

Legislators though, believed the increase was too much, too fast.

“The state made a case that $500 to $550 million was what they needed in the first year,” said House Speaker Larry Householder (R-Glenford) to The Plain Dealer. “And this reaches that goal. And it provided a lot of critical money needed by (local governments) as well, so yes, I was pleased with this.”

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