Tagert: Gas tax hike last resort

By Bobby Harrison/NEMS Daily Journal

JACKSON – Northern District Transportation Commissioner Mike Tagert is not quite willing to go out on that gas tax hike limb with his colleague from another district – Dick Hall.
Hall, the Central District transportation commissioner, has made headlines for saying an increase in the tax on gasoline is needed to pay for the upkeep of Mississippi’s highway system.
The issue is particularly newsworthy because few politicians in today’s political environment are calling for tax increases.
Tagert, who like Hall is a Republican, does not rule out the possibility of an increase in the gasoline tax, but views it “as a last resort.”
He said, “Clearly, we do have some real legitimate needs when it comes to infrastructure. It is not a Mississippi problem, but a national problem.”
In essence, Hall said that, thanks to the 1987 Four-Lane bill, the state has built a highway system that has been ranked as one of the best in the nation. Reason Foundation, a nonpartisan research organization, ranked Mississippi’s road system as 15th nationally – ahead of all four neighboring states. But a flaw in the 1987 program, Hall said, with Tagert concurring, is that money was not set aside for maintenance.
The current revenue stream is lacking when the need to build new highways to keep up with growth and to aid economic development is combined with the need in terms of bridge improvements and routine maintenance, Tagert conceded.
The primary problem, Tagert said, is the Department of Transportation’s revenue from the tax of 18.8 cents per gallon on gas and diesel fuel has not kept up with the skyrocketing construction costs.
Hall said the tax generates 8 cents by today’s standards instead of the 18.8 cents it generated in 1987.
Joey Hudnall, a Jackson engineer associated with the American Council of Engineering Companies, said in the 1980s, asphalt bid for $27 per ton compared to more than $60 per ton today while concrete costs $16 per square yard compared to $90 per square yard today. Steel has gone from 70 cents per pound to $1.40.
In short, Hudnall said, construction costs have more than tripled while, at the same time, the revenue generated from the tax on a gallon of motor fuel has increased much more modestly. In 1989, that tax generated $219 million annually compared to $288 million today.
The key is the tax generates the same amount of money whether a gallon of gas costs $1 or $4. And the modern cars, on average, get much better gas mileage than they did in the 1980s.
Both Hall and Tagert agree a conversation is needed about the future of the highway construction in the state, and both agree the business community, as it did in 1987 when passing the four-lane construction program, must lead the way.
“Don’t wait for politicians,” Hall said earlier this month at the Neshoba County Fair political speakings. “We will follow, but we will not lead.”
Bill Renick of Ashland, chairman of the grassroots organization GetSMART (Start Mississippi’s Approved Roads Today), said his group has proposed innovative ways to spur road construction in Mississippi. Those approaches have included using dedicated Department of Transportation revenue to issue bonds to build specific highways.
“The idea is that the inflation rate on building a highway (as the money comes in) is two or three times what the interest rate will be to pay off a bond,” Renick said.
He cited the recently completed state Highway 9 in Pontotoc County as an example of construction that was bonded. It was finished much quicker and cheaper than the traditional “pay-as-you-go” system, Renick said.
Tagert agreed bonds and other public-private partnerships, such as toll roads, must be discussed as innovative ways to deal with Mississippi’s transportation issues.
And some politicians are even talking about taxes.
bobby.harrison@journalinc.com