Thursday, April 16, 2015

Report: How Red States learned to love gas taxes

As we await the death of Proposal 1 at the ballot box, news from around the nation indicates that Michigan politics is stuck in the mud, still viewing taxes of any kind, including levies for road funding, as bad for the economy.
GovExec.com reports that many Red States are eyeing or have enacted gas tax increases to shore up their roads and bridges. Overall, six states have raised fuel taxes in the last two years and as many as 12 could follow suit this year. Of course, most of these states have less of a crumbling-roads problem than Michigan endures.

In February, Iowa's Republican governor, Terry Branstad, approved a gas-tax hike that sailed through the legislature in under two weeks.  In Utah, the five-cent increase recently enacted marked the first time the state had increased its gas tax since 1997, the same year that Michigan last increased its levy at the pump.
The reason for GOP willingness to swallow these taxes? They’re not really taxes in a general sense, they’re user fees with payments based on who utilizes the roads the most and least.

Unlike the ongoing public debate over the sales tax hike embedded in Michigan's Proposal 1, in Utah, one of the reddest of the Red States, once a funding package was agreed upon, three years of debate was over.
"There was no discussion on: 'Should we even do this?'" Carlos Braceras, executive director of Utah's Department of Transportation, told GovExec.com. "It was around the details of how should we do this, and how should we address it."
Much like the situation in Michigan, Utah’s investment in road repairs and improvements had fallen so far behind that the state was engaged largely in fixing potholes rather than replacing outdated pavement.  Legislators concluded that good roads cost less to maintain, and the longer they waited to replace roads and bridges in poor condition, the more each project would cost.

Here’s more from GovExec.com:
“Business interests, like the Chamber(s) of Commerce, campaign aggressively in favor of funding for roads and bridges on the grounds that decaying infrastructure is a drag on the economy. Republicans have also argued that raising taxes to boost spending now is fiscally responsible because as roads and bridges deteriorate, it becomes more expensive to repair and replace them.

 "’No one wants to raise taxes less than I do,’ South Dakota's Republican governor, Dennis Daugaard, said in his State of the State speech earlier this year. ‘But as I’ve said before, there is a difference between being cheap and being frugal.’

“… The gas tax is an easier levy for Republicans to stomach because it taxes consumption rather than income. To avoid the dreaded T-word, supporters often describe it as a user fee. ‘That’s an important concept,’ Braceras said. ‘The users of the system need to be the ones that pay for the system, and I believe that’s a core Republican principle.’"

 
 

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