By STEWART COARD – CENTO WRITER
The Kentucky General Assembly will be considering the suspension of a gasoline tax cut scheduled for Apr. 1.
Multiple state officials, over the past year, have raised concerns that a state-imposed excise tax on gasoline will not be able to properly fund public works after scheduled decreases. Unlike most states, Kentucky’s gasoline tax is adjusted by the price per gallon at a rate of nine percent. Due to rapidly falling gas prices, some worry that the tax will not bring in enough revenue.
Since June 2014, gas prices in Kentucky fell from roughly $3.83 to $2.03 a gallon, a 47 percent drop.
With the tax rate dropping from around 32 to 22 cents, almost a third of the revenue from the gasoline tax, the major source of income for the state Road Fund, will be lost.
“This would mean we have much less money to spend on public works. With the minimal price we are paying right now, the tax should not be a disincentive,” Pierce and Amelia Harrington Lively Professor of Politics and Law and Chair of the Politics Department Dr. Dan Stroup said. “…The tax would probably not be enough for any sort of conservation purposes, such as reducing gasoline usage, but the aggregate raised would probably provide lots of funds for public works.”
With the low gas prices comforting consumers, taxes may have more room to change.
“If they want the taxes on gasoline to go up, now would be the time to do it with these lower prices. These prices are lower than anyone attending Centre now is used to,” Visiting Assistant Professor of Politics Dr. Lia Rohr said.
However, Dr. Rohr also admitted it would be difficult to suspend the scheduled adjustment after lawmakers in the State Senate turned down the same measure last year.
Last year, Gov. Steve Beshear attempted to establish a minimum state gas tax at the rate of 31.9 cents per gallon, the rate for the last quarter of 2013. The proposal was accepted by the Democrat-controlled Senate but refused by the Republican House.
State Transportation Secretary Mike Hancock also stated his concerns for local funds. Much of the revenue generated from the tax is sent to local governments in order to fund their road maintenance. Work on the roads could be severely delayed.
Speaker of the Ky. House of Representatives Greg Stumbo pointed out the falling taxes will mean less money is inevitably delivered to local areas.
The Brent Spence Bridge that carries Interstates 71 and 75 across the Ohio River between Covington, Ky., and Cincinnati, Ohio, has aroused particular concern. The double-decker bridge owned by Kentucky opened in the 1960s and suffers from greater traffic loads than it was designed for, leading to frequent traffic jams and questions of safety. However, it would cost about $2.6 billion to have the bridge replaced, according to the Brent Spence Bridge Replacement/Rehabilitation project.
State law prohibits taxes from being raised too quickly, even if the prices rise accordingly. The tax may not be increased by more than 10 percent in a single year. According to predictions, it would be 2021 before tax rates could return to what they were just last year.
Sen. Ernie Harris has already filed Senate Bill 29, with a clause that would freeze the tax rate at it’s current position, 27.6 cents per gallon, in order to avoid the 5.1 cents drop scheduled for Apr. 1. Harris hopes the measure would stabilize the tax without increasing it.
Junior Laura Tan stated that if the tax was decreased as scheduled, it was not likely to encourage her to drive more frequently. “But I will be more comfortable driving,” Tan said. “I am one of those people who just instinctively hates myself for spending too much money. I’ll still walk a lot.”
When asked about the possibility of poor road conditions, Tan said, “[It] depends on where you are going to go towards. Roads to popular cities can be pretty bad, but I wouldn’t worry about major highways.”