Pain at the pump

In response to rising gasoline prices, several states have considered capping their gasoline sales taxes to ease the burden for their residents. While that may save drivers some money, state and local governments lose revenue.American City & County asked readers of its weekly e-mail newsletter whether lowering gas taxes is beneficial or if states should try another approach to lower gas prices.

“Reducing or eliminating taxes on fuel in response to rising gas prices is a mistake. The local/state tax in most states is 18 to 25 cents per gallon, and the volatility of price-per-gallon fluctuates at least twice that amount. The motorist would suffer in the long run without the commensurate gas-tax funded highway repairs, improvements and mass transit subsidies. High fuel prices are painful but will spark all kinds of alternative — but previously unfeasible — energy technologies.”
— Eric Honeyfield, City Manager, Gallup, N.M.

“It would be best for the long-term future of this country to actually raise gas taxes in order to enforce conservation and development of alternate sources. The Bush Administration’s debacle in Iraq shows that we cannot be at the mercy of the Middle Eastern countries in regard to our energy future, and we have to take steps to reduce dependence on foreign oil.”
— Joe Bachman, County Engineer, Tuscarawas County, Ohio

“Reductions in gas taxes could be catastrophic for many cities and counties across the nation. These agencies depend on the revenue from these taxes for the funding of street maintenance activities and resurfacing programs, which are already typically 40 to 60 percent underfunded by many agencies. Any reduction in gas tax revenues distributed to agencies will ultimately result in higher local property tax rates. Streets have to be maintained. They only have a certain life span and if they are not properly maintained and resurfaced on an appropriate cycle they will deteriorate to the point they have to be rebuilt. Instead of making reductions to gas taxes, it would be more beneficial and less noticeable now if the taxes were actually raised 2 to 5 cents per gallon.”
— John Calvert, Director, Tennessee Public Works Institute