Ohio Lawmakers Raise Gas Tax, Still Seek Long-Term Road Construction Funding

Apr 3, 2019

Members of the Ohio House and Senate reached a deal to raise the gas tax by 10.5 cents beginning in July. The lawmakers say that will be enough to help Ohio close a funding gap for construction on the state's roads and bridges.

The transportation budget bill, which passed both chambers Tuesday afternoon, brings the state gas tax total to 38.5 cents a gallon. The deal also included a 19 cent increase to the diesel fuel tax.

These hikes are projected to generate about $865 million a year in revenue for Ohio’s infrastructure. The state will get $524 million of that revenue for construction projects, the rest will go to local governments.

House Speaker Larry Householder (R-Glenford) says, after weeks of debate on the issue, they think this strikes the right balance.

“The state made a case that between $500 to $550 million was what they needed in the first year and this reached that goal, and it provided a lot of critical money needed by the locals as well. So yeah, I was pleased with this,” Householder says.

Senate President Larry Obhof (R-Medina), who was apprehensive at raising the gas tax from the start, said the final version of the bill makes sure the state can still maintain its roadways.

“Improving our roads, improving our bridges, fixing problems that we see throughout Ohio and making Ohio as strong as it can be. While taking exactly what we need and preserving the taxpayers’ ability to pay their bills before they pay the government’s,” Obhof says.

Gov. Mike DeWine first proposed an 18 cent increase to the gas tax, saying this would help bridge an expanding budget gap in the Ohio Department of Transportation’s construction funds. ODOT said it needed to generate an average of $1 billion annually over the course of 10 years.

DeWine believes the legislature’s increase will work for the state, for now.

“The real difference is not in the first year and the second year. The real difference you see between how we approach this is I was trying to get a fix for 10 years, look that may have been overly ambitious to try to do that, we’ve got a fix for a few years,” DeWine says.

Householder agrees that this might only help carry Ohio’s construction costs for a few years. But he highlighted a study commission created in the bill that will be required to take an in-depth look at the state’s driving habits and fuel use.

The group can determine if a gas tax will still be the best indicator of construction costs and if developments in new technology might lead to changes.

“To find out, what Ohio’s gonna look like down the road and how are we gonna pay for our roads and pay for our infrastructure moving forward and making certain that Ohio maintains their place as a leader for transportation in this country,” says Householder.

The battle over increasing the gas tax reached a stalemate in conference committee, when members of the House and Senate must come to an agreement on the changes made to the bill.

The House originally had a hike of 10.7 cents and the Senate put the gas tax increase at 6 cents. At one point, Householder said the House had a deal with DeWine at 11 cents and blamed the Senate for holding out.

State Sen. Matt Dolan (R-Chagrin Falls) said fighting to bring that 11 cents down half a cent meant keeping about $33 million in the taxpayers’ pockets.

“And while sometimes it felt like it was the Senate against the world, that was always our mission. Fill the need, protect the taxpayers,” Dolan says.

The transportation budget put $70 million towards public transportation. It also got rid of the state’s two-license plate rule, so that starting in 2020, vehicles will only be required to display one license plate.

DeWine has the power to line-item veto provisions of the bill. He said it’s a possibility but wants more time to read over the legislation first.