By Bill Crawford
Happy New Year, the price of gasoline is falling. Why? Supply is up. Why? Remarkably, with the election over, all our refineries are running near full capacity.
Gas prices are one of those things we like to whine about but have no control over. They jump up, down, and vary from pump to pump for no apparent reason. Many of us seek out the lowest pump price when it comes time to fill up. Others seek out pumps with no ethanol no matter the price.
About 10 percent of gas prices go for taxes. The feds and the state each get 18.4 cents per gallon (the .4 is an environmental protection fee).
Gas taxes are among the most pragmatic taxes levied. For the most part they go to support infrastructure essential to economic activity…highways and bridges. If you can’t move goods and people from place to place, you won’t have much of an economy.
Kind of like hospitals…if you don’t have the infrastructure to support a healthy workforce, you won’t get much work done.
In 1987, Mississippi business leaders got the Legislature to pass an ambitious four-lane highway program. To pay for it, the Legislature had to up gas taxes. I was amongst those who shot down Gov. Bill Allain’s veto in order to authorize the program.
The average price of gas in 1987 was 89 cents a gallon. We upped the gas tax by 4 cents to 18 cents a gallon.
Today, gas costs four times as much, but the state tax is still 18 cents.
Meanwhile, the 1987 program cost twice its $1.6 billion projected cost and in 2002 the Legislature added miles, pushing projected costs over $5 billion.
Transportation Commissioner Dick Hall has, appropriately, called attention to the now 25-year-old tax rate, noting “it doesn’t have the buying power that it used to.” He also points out that many of our four lane highways are aging and need maintenance, but the funding didn’t include ongoing maintenance costs.
Hall stopped short of recommending a tax increase, but said it should be one option the Legislature should consider to keep our high quality highway system intact. He estimated each one-cent increase would generate $20 million.
In reality, though we would whine loudly, gas taxes could go up 10 cents a gallon and we wouldn’t notice it among all the ups, downs, and variances from pump to pump. However, that would make our prices too uncompetitive with neighboring states.
Here’s my thought for the New Year. The Legislature should consider increasing gas taxes to the national average, about a nickel a gallon. Give half to highways. Give the other half to hospitals by expanding Medicaid.
Good highways and good hospitals … two important Mississippi infrastructure needs.
Bill Crawford (email@example.com) is a syndicated columnist from Meridian.