Debating the Gas Tax, Part 1

Editor’s note: The opinions expressed in this blog post belong to the author and do not necessarily reflect the opinions of RSG.

Raising the gas tax in a state where the car is king is a tough call. Senate Bill 16, proposed in the recently completed legislative year, was not passed. It would have raised the gasoline excise tax and vehicle license and registration fees in order to fund deferred maintenance of state highways and local streets and roads. 

We had an interesting discussion in the office about some of the pros and cons of raising the gas tax and wanted to share our thoughts. Today, we’ll present the pro side, which believes that the gas tax should be raised, and now is the time.

Our roads need maintenance. Funding the repair of our deteriorating infrastructure, especially transportation systems, can help reduce congestion, create jobs, and increase economic activity. A higher gas tax would also help to support public transit and transportation for disabled individuals and other disadvantaged groups.

This is the time to seize the opportunity. Current gas prices are relatively low, around $3 locally. A small (10- to 12-cent) increase would not be as noticeable, because people have seen prices rise to nearly $5 a gallon within the last few years. 

Finally, according to former Treasury Secretary Larry Summers, writing in Wonkblog, and reported by Eric Jaffe, writing in Citylab, raising the tax by 40 cents a gallon would pay for itself. Strapped middle class drivers would recoup what they paid for the tax in reduced maintenance costs, thanks to improved roads.

See our next blog to catch the other side of the debate.

Written by Dima Galkin, a Senior Analyst at RSG