{"id":27789,"date":"2017-01-05T11:58:32","date_gmt":"2017-01-05T17:58:32","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=27789"},"modified":"2017-01-05T14:49:03","modified_gmt":"2017-01-05T20:49:03","slug":"why-oklahoma-and-other-red-states-might-pump-up-gasoline-taxes-to-fill-budget-holes","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2017\/01\/05\/why-oklahoma-and-other-red-states-might-pump-up-gasoline-taxes-to-fill-budget-holes\/","title":{"rendered":"Why Oklahoma and Other Red States Might Pump Up Gasoline Taxes to Fill Budget Holes"},"content":{"rendered":"<div id=\"attachment_27791\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><a href=\"https:\/\/www.flickr.com\/photos\/michael_kesler\/2567051788\/\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-27791\" alt=\"An abandoned gas station near Edmond, Okla.\" src=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2017\/01\/glowing-pumps.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2017\/01\/glowing-pumps.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2017\/01\/glowing-pumps-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2017\/01\/glowing-pumps-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2017\/01\/glowing-pumps-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/a><\/p>\n<p class=\"wp-media-credit\">Michael Kesler \/ Flickr\/CC BY-NC-ND 2.0<\/p>\n<p class=\"wp-caption-text\">An abandoned gas station near Edmond, Okla.<\/p>\n<\/div><p>Oklahoma lawmakers are staring into a budget hole that\u2019s nearly $900 million deep \u2014 and they might not be able to cut their way out of it. Legislators are considering tax increases to help fund state government, and one idea is gaining traction: Hiking taxes on gasoline and diesel.<\/p><p><iframe loading=\"lazy\" src=\"https:\/\/w.soundcloud.com\/player\/?url=https%3A\/\/api.soundcloud.com\/tracks\/301080456&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=false\" height=\"150\" width=\"100%\" frameborder=\"no\" scrolling=\"no\"><\/iframe><\/p><p>State taxes on motor fuel haven\u2019t been touched since 1987. There are a lot of similarities between the situation then and what Oklahoma lawmakers now face: An economy shaken by low oil prices and dwindling revenue streams to fund state government.<!--more--><\/p><p>Raising fuel taxes helped the state in the &#8217;80s \u2014 and lawmakers might try it again.<\/p><p>Carl Davis, research director at the Institute on Taxation and Economic Policy, says Oklahoma lawmakers have good reason to raise taxes at the pump.<\/p><p>\u201cThe state has one of the oldest gas tax rates in the country,\u201d he says. \u201cIt&#8217;s turning 30 years old, having not budged a single penny in 30 years.\u201d<\/p><p>A state ballot question to raise the gas tax was trounced in 2005. And over the decades, the value of that unchanged tax rate \u2014 16 cents per gallon of gasoline and 13 cents per gallon of diesel \u2014 has eroded with inflation. Davis says more fuel-efficient cars and trucks have also taken a bite out of that revenue stream.<\/p><p>\u201cIt&#8217;s just the math just doesn&#8217;t work to levy the same gas tax rate for 30 years. It just loses purchasing power,\u201d he says.<\/p>\n<h3>Fill it up<\/h3><p>During the 2016 legislative session, when lawmakers were dealing with a bigger budget hole of $1.3 billion, Rep. Earl Sears, R-Bartlesville, introduced <a href=\"http:\/\/www.oklegislature.gov\/BillInfo.aspx?Bill=HB3212&Session=1600\">legislation<\/a> increasing gasoline and diesel taxes by three cents per gallon.<\/p><p>\u201cOnce again the same conversations are taking place,\u201d says Sears, chair of the House finance committee. \u201cWhat are we going to do to fill the hole?\u201d<\/p><p>The 2016 measure was defeated in committee on a 14 to 9 vote. Sears\u2019 three-cent hike on fuel would only have applied when fuel was selling for less than $3 a gallon. Any hike on fuel taxes will likely include such a trigger. Sears expects such legislation to be introduced in the upcoming 2017 legislative session, which starts in February.<\/p><p>\u201cI\u2019ve been told yesterday there\u2019s already a couple of bills,\u201d he says. \u201cI am confident there will be a conversation about raising the gasoline tax.\u201d<\/p>\n<h3>Bipartisan potholes<\/h3><p>Motor fuel taxes are a relatively small revenue stream for Oklahoma, generating about $474 million in 2016, state tax commission data show. That number includes revenue from taxes on other fuels, including compressed and liquified natural gas and aviation for fuels \u2014 a drop in the bucket compared to the $4.1 billion and $2.5 billion in income and sales tax revenues.<\/p><p>A Senate report suggested Sears\u2019 bill last year would have only generated an additional $42 million a year. Many of the one-time budget fixes were used to fill last year\u2019s budget hole. So state finance leaders say the math of filling the 2017 hole might have to come from adding up <a href=\"http:\/\/newsok.com\/article\/5531704\">several small increases<\/a> \u2014like the cigarette tax or ending sales tax exemptions on services like car washes.<\/p><p>The lion\u2019s share of gasoline and diesel taxes in Oklahoma and other states are directed to transportation \u2014 agencies and programs that build and maintain highways, roads and bridges. Sears says he\u2019ll push to ensure that revenue from any increase on fuel taxes in Oklahoma remains earmarked for transportation.<\/p><p>Motor fuel taxes almost exclusively support transportation infrastructure. Davis with ITEP says that\u2019s a major reason why politicians \u2014 even in red states like Oklahoma \u2014 don\u2019t always mind raising them.<\/p><p>\u201cThere&#8217;s really no such thing as a Republican pothole or a Democratic bridge,\u201d he says. \u201cIt&#8217;s an issue that brings the parties together.\u201d<\/p><p>\u201cA lot of stars have to align\u201d for motor fuel tax increases to survive state legislatures, Davis says, but there is good evidence to suggest 2017 could see a wave of such tax hikes. Oklahoma is one of about <a href=\"http:\/\/www.taxjusticeblog.org\/archive\/2016\/10\/looking_back_at_four_years_of.php\">a dozen states<\/a> seriously considering increases, a list that includes Republican strongholds like Mississippi, Louisiana and Alaska, where Gov. Bill Walker has <a href=\"https:\/\/www.adn.com\/alaska-news\/2016\/12\/19\/walker-proposes-tripling-gasoline-tax-to-take-a-bite-out-of-alaska-budget-deficit\/\">proposed<\/a><a href=\"https:\/\/www.adn.com\/alaska-news\/2016\/12\/19\/walker-proposes-tripling-gasoline-tax-to-take-a-bite-out-of-alaska-budget-deficit\/\"> tripling <\/a><a href=\"https:\/\/www.adn.com\/alaska-news\/2016\/12\/19\/walker-proposes-tripling-gasoline-tax-to-take-a-bite-out-of-alaska-budget-deficit\/\">taxes<\/a> on motor fuel.<\/p><p>Motor fuel taxes are paid by users, which, \u201cin conservative circles,\u201d Davis says, \u201ccan be an especially appealing aspect of it.\u201d<\/p><p>Motor fuel taxes are regressive: They affect low-income people more than those with higher incomes. But, in recent years, gasoline and diesel prices have been pretty low. And, unlike other taxes, Davis says motor fuel taxes don\u2019t usually get the same pushback from the business community.<\/p><p>\u201cAt some point it&#8217;s just not worth refusing to pay a few more pennies per gallon if the cost is going to be having to hit a pothole and get your vehicle realigned or wasting time and money stuck in traffic,\u201d he says.<\/p><p>The State Chamber of Oklahoma, for example, supports raising motor fuel taxes as long as the increase funds transportation infrastructure, says Mike Jackson, senior vice president of political affairs and advocacy.<\/p><p>\u201cWe have always maintained that the tax must be dedicated to the sole purpose of the preserving and improving our roads and bridges,\u201d he wrote in a statement emailed to StateImpact.<\/p><p>Any tax increase proposed by Oklahoma lawmakers will need a <a href=\"https:\/\/stateimpact.npr.org\/oklahoma\/2014\/01\/30\/the-legacy-and-challenges-of-a-state-question-that-shapes-bills-decades-later\/\">legislative supermajority<\/a> \u2014 a tall order, even with a $900 million budget gap. There\u2019s another reason why a motor fuel tax hikes might fly in 2017: It\u2019s not an election year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>State taxes on motor fuel haven\u2019t been touched since 1987. There are a lot of similarities between the situation then and what Oklahoma lawmakers now face: An economy shaken by low oil prices and dwindling revenue streams to fund state government.<\/p>\n","protected":false},"author":36,"featured_media":27791,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[490,16],"tags":[679,349],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/27789"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/comments?post=27789"}],"version-history":[{"count":8,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/27789\/revisions"}],"predecessor-version":[{"id":27798,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/27789\/revisions\/27798"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media\/27791"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media?parent=27789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/categories?post=27789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/tags?post=27789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}