In one of his first major acts in office, Gov. Mike DeWine (R-OH) signed into law the state’s first gas tax increase since 2005.
The issue has been the focal point of his first few months in office, and negotiations with House and Senate Republicans have not been easy. But on Tuesday, all parties finally agreed to a compromise: 10.5 cents on regular fuel, and 19 cents on diesel.
That will bring the total gas tax to 38.5 cents, and the total diesel tax to 47 cents, both of which are currently taxed at an equal rate of 28 cents.
The increase, set to go into effect July 1, doesn’t seem to have the support of most Ohioans, especially those who rely on diesel fuel.
“Diesel fuel powers our economy, because it’s what the trucks that deliver Ohio-made products to market run on. A 19 cent increase on diesel will move Ohio well past the state average of 30.2 cents of tax per gallon and leave us with the sixth highest tax rate on diesel fuel in the country. This does not make Ohio more competitive and will be damaging to Ohio’s economy and to our businesses,” the Ohio Chamber of Commerce wrote in a recent article.
The Ohio Chamber of Commerce said it “strongly objected to establishing different rates for gas and diesel fuel.”
“So we’re disappointed that the governor and the legislature agreed to a diesel tax increase that’s nearly double the gas tax increase,” the group added.
Prior to the gas tax’s passage, the Ohio Chamber of Commerce along with the Ohio Business Roundtable and the Ohio Manufacturers Association released a statement objecting to the disproportionate diesel tax increase.
“As the administration and legislature continue to negotiate, we urge them not to ignore the potential harm to Ohio’s economy and to our businesses that could result if the diesel tax is increased by 20 cents, as has been discussed,” they said in a joint statement. “The current gap between the proposed gasoline and diesel fuel rates should be narrowed to as close to parity as is possible, while still ensuring adequate and reliable funding for Ohio’s transportation system, as the governor first proposed.”
One local news outlet spoke with semi-truck operators at Truck World in Hubbard, Ohio Wednesday to get their reaction to the news.
“Truckers pay all kinds of taxes on everything. It’s just getting ridiculous,” Mitchell Stambaugh told WFMJ. “You can’t hardly make any money. It’s not good. It’s only going to make the prices of commodities go up.”
Indeed, Tony Long, director of tax and economic policy for the Ohio Chamber of Commerce, told Statehouse News Bureau that most businesses cannot “eat additional costs without doing something to counteract that, whether it’s adding it to the cost of the product, doing something else or finding ways to account for that new cost.”
Local school districts, which rely on diesel to fuel their bus fleets, could be hit hard by the tax increases.
“The increase on the diesel tax will definitely increase the amount of money we spend monthly in fuel. We currently spend $200,000 on fuel,” Ryan Dunn, director of transportation for Boardman Schools, told WFMJ.
For Dunn’s district, the gas tax increase translates into an additional $15,000 on fuel each year.
Similarly, Brookfield Local Schools Superintendent Velina Jo Taylor said her district will need to “re-allocate in order to anticipate the uptick in our expenses for our fleet of buses.”
“This always involves difficult choices,” she added.
Conservative groups across the state are not pleased with the Republican governor’s decision to increase taxes with no offsets.
John McAvoy, president of the Ohio Liberty Coalition, said in a statement that “DeWine’s push for a higher gas tax flies in the face of the nearly two-thirds of Ohioans who oppose it.”
“Even worse, the proposal comes without a provision for a performance audit by the state auditor,” he continued. “As with any proposed tax increase, we demand to know whether the members of the legislature are being good stewards of our tax dollars. We want evidence, and without a performance audit, there is no way we should allow this bill to pass.”
We the People Convention President Tom Zawitowski said his organization agreed with the Ohio Senate’s proposal for a six-cent increase “offset by tax cuts in other areas.”
“FreedomWorks’ Ohio grassroots activists are coming out strong against this big government proposal to raise taxes,” FreedomWorks President Adam Brandon added. “FreedomWorks is committed to small government, lower taxes and economic freedom.”
As The Ohio Star reported, Baldwin Wallace University found that 55 percent of Ohioans either “oppose” or “strongly oppose” the tax increase, while The Buckeye Institute found that 65 percent are opposed.
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