Gas Tax Perspective
The Associated Press reports the state gas tax is now at 30.15-cents-per-gallon, its highest possible rate. (DOR release here.)
That news will prompt a lot of news releases from various corners, particularly Republicans like Bill Graham, who has pegged a large part of his run for governor to his campaign to curb further gas tax hikes. Update: See I didn't even get a chance to hit the send button before this came.
Before the spin machine (on both sides) hits over-drive, here are few things to consider:
- * The increase from the previous gas tax rate is equivalent to a penny for every five gallons you pump. If you have a 15 gallon tank, that 3 additional cents to fill 'er up.
- * With the exception of some discount club gas stations and few places that sell on the cheap, most station's I've driven by in the past few weeks are selling gas at somewhere north of $3 a gallon. That means the gas tax is about 10 percent of your fill-up cost.
- * Gas taxes would have risen a little more than 3.5 cents had the legislature not capped the gas tax in last year's budget.
- * That cap is only in law until June 30, 2009, when it will sunset and the tax can rise freely with the wholesale cost of motor fuels.
- * Don't forget the federal gas tax of 18.5-cents-per-gallon. That puts the total taxes included in your per-gallon fuel cost at around 16 percent.
- * Hopping in the Feds' own way-back machine, it looks like oil prices in 2005 were right around $50 a barrel. The price of oil hit $100 a barrel yesterday. More than half the cost of a gallon of gas is tied to the price of that barrel of oil.
- * The average retail price of gas was $1.78 on Jan. 3, 2005, meaning that the price has gone up more than $1.20 since then.
- * Gas tax money is used to do build roads, the cost of which has gone up because a good deal of the stuff you need to build a road is made of petroleum. That has caused enough concern for the honorables to study the issue.
- * At this point in the conversation, the $172 million a year that the General Assembly takes from the highway trust fund and puts into the General Fund usually causes some consternation. As a reminder, the following was included in this year's budget:
It is the intent of the General Assembly to phase out funds transfers from the Highway Fund and the Highway Trust Fund to the General Fund and to other State agencies over a five year period of time. The funds transfers from the Highway Fund and the Highway Trust Fund to the General Fund and to other State agencies would be reduced to fifty percent (50%) of the current funds transfers, effective July 1, 2009. The funds transfers from the Highway Fund and the Highway Trust Fund to the General Fund and other State agencies would be reduced an additional fifty percent (50%) of the amount being transferred on June 30, 2011, effective July 1, 2011. The funds transfers from the Highway Fund and the Highway Trust Fund to the General Fund and other State agencies would be eliminated completely, effective July 1, 2013.