Road funding gains support

Columns

October 17, 2012

Road funding gains support

By Sid Salter/Syndicated columnist The Picayune Item Picayune Item Wed Oct 17, 2012, 09:05 AM CDT

PICAYUNE — Earlier this year, I wrote about Republican Central District Transportation Commissioner Dick Hall’s lone wolf effort to focus attention on the fact that this state’s infrastructure revenue stream won’t keep pace with the demand for highway construction and maintenance at current and future costs.

As it turns out, Hall isn’t alone and he’s far from the only Republican talking about increased revenue for infrastructure needs. Mississippi isn’t the only state facing an infrastructure crisis at a time when tax dollars to build and maintain roads are hard to come by — and the scarcity of resources is leading a number of conservatives toward strategies that either raise taxes and fees or substantially redirect existing revenues.

Over in Texas, two strategies have been reported that address the highway funding problem. First, there is the proposal that would raise the state’s vehicle registration fee by $50 — which would essentially double the present costs — with the funds totally earmarked for highways. That strategy would raise an estimated $1.2 billion annually.

Advocates claim that the additional fee revenue can be leveraged into some $15 million by selling bonds. Another Texas initiative designed to address the new for new highway construction and maintenance revenues is an effort to dedicate the existing state sales taxes collected on the sale of vehicles.

Who among Texas movers and shakers are pushing such alternatives? Republicans and business groups are among the leading voices for facing the infrastructure funding shortfalls with new revenues.

As in Mississippi, the primary existing sources of revenue for road building and maintenance in Texas are federal and state gas taxes, but those revenues have not kept pace with rising costs and have been further diminished by increased fuel efficiency in modern vehicles.

The parallels are obvious. Texas taxpayers pay a combined 38.4 cents per gallon in federal and state sales taxes. Texas state gas taxes are 20 cents per gallon and trail the national average state sales tax on gas by 9.7 cents per gallon.

Mississippi’s state sales tax on gas is 18.4 cents per gallon (CPG) and is a flat tax. When we pay $2 a gallon for gas at the pump, the tax is 18.4 CPG. When we pay $4 per gallon at the pump, the state tax is still 18.4 CPG. The only way the state takes in more revenue in gas taxes is for the overall volume of gas consumed to increase.

The state’s 18.4 CPG gas tax was last raised in 1987. According to a report by the American Society of Civil Engineers, the state’s flat gas tax isn’t keeping pace with the inflation of rising highway construction and maintenance costs and with the modern fuel economy improvements in today’s vehicles.

Hall says the ASCE report makes clear that Mississippi has an estimated $30 billion in highway and bridge needs between 2008 and 2035. But even in a “best-case scenario,” the state’s current gas tax structure would only generate $15.3 billion to meet those expenses.

In Mississippi, drivers pay total federal and state taxes of 37.2 cents per gallon of gasoline and 43.2 cents per gallon of diesel. Mississippi’s excise tax totals 18.4 CPG on gasoline and diesel, with 0.4 cents going to an environmental protection fee. In coastal Hancock, Harrison and Jackson counties, there is an additional 3 CPG seawall tax.

Dick Hall may be bucking some Republicans, but his math is solid. Like those in Texas and a host of other states, Mississippi lawmakers face difficult choices on the state’s revenue stream to fund road maintenance and construction.

(Sid Salter is a syndicated columnist. Contact him at 601-507-8004 or sidsalter@sidsalter.com)

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