Central District Transportation Commissioner Dick Hall is a savvy politician who understands that Republicans who call for anything that can be construed as a tax hike usually end up as political road kill in GOP primaries – yet there Hall stood last week under the old oaks at the Neshoba County Fair repeating his call for an increase in the state’s gasoline tax for the second year in a row.
That Hall mentioned the state’s anemic gas tax in his speech should be no real shock since he’s been the consistent voice of sanity on this important point of public policy for a decade. Hall worked hard during the 2013 Mississippi legislative session to advance two bills that would have created new revenue for the construction and maintenance of Mississippi’s roads and highways until they died in committee.
That advocacy came after Hall beat the drum in speeches for the past several years for state government to realistically assess the growing disparity between the number of Mississippi roads that are in need of maintenance and repair and the funds being generated to pay for that work.
Educating Mississippi voters about the problem Hall is talking about will be a tall order. Those voters are struggling with the rising price of fuel, and there’s not much appetite for any policy changes that would raise the pump price of gas and diesel fuel in the state.
Voters who want new roads constructed now face the reality that construction funds are being shifted to maintenance and repair because the current gas tax isn’t producing sufficient revenue and the federal earmark funds that the state has long relied upon to fund highway construction have ceased. Voters who want decaying current roads repaired now face the reality that the list of roads needing repair is growing faster than the revenue is accruing to fix them.
In round numbers, Hall said that today Mississippi has about 4,700 miles of highways in dire need of repair at an estimated current cost of $960 million.
Yet one of the biggest public policy and economic misconceptions in Mississippi is the notion that as gas prices have risen, state gas tax revenues have risen with them. That’s just not the case.
Mississippi’s 18.4 cents per gallon gas tax (CPG) is a flat tax. When we paid $1 a gallon for gas, the tax was 18.4 CPG.
When we pay $3.75 per gallon at the pump, the state tax is still 18.4 CPG. The only way the state takes in more revenue in gas taxes is for the volume of gas consumed to increase.
The state’s 18.4 CPG gas tax was last raised in 1987. According to a report by the American Society of Civil Engineers, Mississippi’s flat gas tax isn’t keeping pace with the inflation of rising highway construction and maintenance costs and with the modern fuel economy improvements in today’s vehicles.
Last year, Hall said that a national report found that Mississippi has an estimated $30 billion in highway and bridge needs between 2008 and 2035 but that the state’s current gas tax structure would only generate $15.3 billion to meet those expenses in a “best-case” scenario.
The U.S. Energy Information Administration reported that the national average federal/state tax on gasoline is 48.8 CPG. The federal tax on gasoline is 18.4 CPG. The national average state gasoline excise tax is 23.5 CPG. In Mississippi, drivers pay total federal and state taxes of 37.2 cents per gallon of gasoline and 43.2 cents per gallon of diesel. Mississippi’s excise tax totals 18.4 CPG on gasoline and diesel, with 0.4 cents going to an environmental protection fee. In coastal Hancock, Harrison and Jackson counties, there is an additional 3 CPG seawall tax.
Mississippi’s gas tax is lower than Alabama (20.9 cents per gallon), Arkansas (21.80 CPG), Louisiana (20 CPG), or Tennessee (21.40 CPG). The next logical question would be whether Mississippi roads and bridges are in better shape that the transportation infrastructure in those surrounding states?
A Mississippi State Senate task force will examine those questions and prepare a report by 2014. But in terms of actually getting some political traction on fixing the mechanism Mississippi has in place to fund highway construction and maintenance, somebody will have to find a detour around the perils of GOP primaries and the mention of any kind of tax increase.
SID SALTER is a syndicated columnist. Contact him at (601) 507-8004 or firstname.lastname@example.org.