Journal News: Gas taxes fail in their purpose
media mention11:02 PM, Mar. 19, 2012
Written by A Journal News editorial
Sunday’s report on gas taxes in New York helps codify the pain and anguish so many New Yorkers feel when they so much as drive by a gas station in the Empire State. “It’s outrageous,” declared Stephen Lester, whose quest for cheaper gas takes him from Dobbs Ferry to New Jersey, carrying with him twin, five-gallon plastic containers he fills in addition to his tank. “There’s an assault on our economy and the weapon is taxation,” said Ed Day, Rockland County legislator, who last year sought to reduce the county’s sales tax on gasoline.
They are hardly alone in their disdain.
As staff writer Cathey O’Donnell reported, New York ranks first in gas taxes, slightly behind California and Connecticut, according to January figures from the American Petroleum Institute. We have gas taxes on top of gas taxes. New York levies five separate taxes per gallon of fuel: a motor fuel excise tax; a petroleum business tax; a state sales tax capped at 8 cents a gallon; a petroleum testing fee tax; and a spill tax. They add up to 34.05 cents on a pump price of $3.90 a gallon.
Additionally, there is a federal excise tax of 18.4 cents a gallon — unchanged since 1993 — and a local sales tax that ranges from 3 percent to 4 percent. The local sales tax averages 14.4 cents a gallon.
There is plenty of room for outrage in that litany — particularly in a road-loving culture that regards cheap gasoline as a right. But the harsh truth in New York — and certainly the nation as well — is that the combined state-federal-local tax levy, so severely eroded by inflation, and policymakers’ myopia, is insufficient to accomplish any of the important things the taxes must. The nonpartisan Institute on Taxation and Economic Policy wrote in a December report that gas taxes “are built to fail,” because they have not kept pace with construction costs, resulting in “disastrous effects on the nation’s transportation infrastructure.”
Consider: The levy doesn’t begin to cover the cost of maintaining roads and bridges, or building new ones to account for population growth. New York, notwithstanding its No. 1 position on gas taxes, needs to spend $250 billion over the next 20 years just to maintain such infrastructure; $80 billion of that is unfunded, according to a State Comptroller’s Office report. Forty-five percent of the bridges in Westchester have been designated “functionally obsolete”; about half of Putnam’s are similarly compromised; 108 of Rockland’s 237 bridges are functionally obsolete or structurally deficient. Who, if not the driving public, should foot those bills?
Conditions are bad all over: 45 percent of roads nationwide are in less than good condition, and 12 percent of bridges are structurally deficient, according to the Council of State Governments. “State governments face huge gaps between how much they need to spend to repair roads … and how much they expect to have under current funding,” according to the council. More than 45 percent of federal highways and major roads are not in good condition — at a time where Congress struggles to reach common ground on a transportation bill that addresses even basic needs. At the same time, states are collectively losing about $10 billion annually because their gas taxes have not kept up with rising construction costs.
Similarly, gas tax revenues remain insufficient to push consumers, in a major way, toward more fuel-efficient or environmentally friendly vehicles — keys to reducing our reliance on foreign oil; public opinion polls typically point to much higher price points to accomplish that. (A plus: during the financial crisis, the Obama administration successfully pushed vehicle manufacturers to make their fleets more fuel efficient.)
Likewise, the taxes do not raise enough revenue to push major investment in renewable energy sources, such as solar and wind; nor do the tax streams work in a concerted way to support mass transit.
Heading in the other direction, the Republican-controlled House has pushed a multi-year transportation bill that would eliminate guaranteed taxpayer support for mass transit while increasing oil and gas drilling in environmentally sensitive areas. The Senate, wisely, has rejected that scheme.
Nothing on the public policy horizon stands to reduce the public angst over rising gas prices, end those sojourns to New Jersey in search of cheaper gas, or correct the car culture’s belief that cheap energy is our destiny.
But there should be no deluding ourselves that the price at the pump, including the litany of taxes, reflects our true burden.