Burnt Orange Report

A Gas Tax Increase?

By Byron LaMasters

This Houston Chronicle article yesterday spurred quite a reaction among Texas blogs:

Gov. Rick Perry indicated Wednesday that he is receptive to finding a back-door approach, keyed to inflation, for raising state gasoline taxes. [...]

The idea of tying the gasoline tax to an inflation index was broached Tuesday by Speaker Tom Craddick. Perry said the proposal is "an interesting idea."

The tax, which has been set at 20 cents per gallon since 1991, will raise almost $3 billion this year, but it hasn't kept pace with the increasing costs of building and maintaining highways. Texas' gasoline tax rate is midrange among states.

Three-fourths of Texas' gasoline tax revenue is dedicated by the state constitution to highways and one-fourth to public education.

Both Perry and Craddick indicated that any increase would be limited, at least initially.

State Rep. Mike Krusee, R-Round Rock, chairman of the House Transportation Committee, said he is trying to draft legislation to tie the gasoline tax to a highway construction cost index or something similar. [...]

Dick Lavine, an analyst with the Center for Public Policy Priorities... said the gasoline tax is regressive. The increase, he said, would disproportionately hit poorer Texans harder because gasoline consumption is not a function of wealth.

"No matter how rich you are, you really don't drive that much farther than the average person," Lavine said.

Kuff says that it's an "idea to consider", while Greg and Save Texas Reps are decidedly negative to the idea. Rick Perry vs. the World on the other hand, takes a look at the proposal in the context of the looming GOP primary for Governor, while In the Pink, Texas offers up a laugh.

My two cents on the idea? Frankly, I think that increasing the gas tax is a good idea for Texas. Texas has by far the most highway mileage of any state in the country, so one might think that we'd have a high gas tax in order to maintain that structure - well, no. Texas 's twenty cent gas tax ranks us #36 in the nation. On the other hand the three other "megastates", New York, California and Florida rank first, third and eighth in their gas tax respectively ($0.392, $0.359, and $0.306).

I generally oppose regressive taxation, but there's a very clear differentiation between gambling and a gas tax. Whereas gambling has negative social effects, a gas tax has positive ones. Higher taxes on gasoline discourage driving, encourage public transportation and carpooling, and reduce pollution and traffic congestion. Also, as far as regressive taxes go, a gasoline tax is less regressive than most. Low income people are more likely to use public transportation, whereas high-income folks are more likely to drive gas-guzzling SUVs. All in all, a gas tax increase wouldn't be my first choice, but of the options that have been seriously considered thus far, it's definitely one of the better ones.

Posted by Byron LaMasters at February 18, 2005 03:55 AM | TrackBack