Another idea for fuel taxesBy JACK RYAN,
By whatever means necessary, legislative Republicans in Jackson seem determined to prove that a straight line is not the shortest distance between two points.
The topic is the state’s gasoline tax, which is among the lowest in the country and has not been raised since the late 1980s. That’s only a concern because the four-lane highway program, which also began in the 1980s, has greatly increased the state’s highway maintenance expenses.
It’s no surprise that a 30-year-old gasoline tax cannot keep up, especially when you consider that many of today’s vehicles are a lot more fuel-efficient than their predecessors. Factor in rising construction costs and the problem gets worse.
The solution seems simple: Raise the fuel tax to bring in enough money to keep up all those nice highways the state built. But legislative Republicans, many of whom unwisely signed a pledge not to raise taxes, want nothing to do with it.
Some lawmakers hope that an internet sales tax will bring in money that can be spent on roads, and the House Transportation Committee chairman offered another idea last week: Eliminate the state’s 4 percent income tax bracket in exchange for raising fuel taxes by 12 cents a gallon on gasoline and by 15 cents on diesel fuel.
The 4 percent tax is collected on a person’s income between $5,000 and $10,000. If the Legislature removes it, on the heels of the phase-out of the 3 percent tax on the first $5,000 of income, the state’s only income tax would be 5 percent on anything above $10,000 a year.
Once the 4 percent tax goes away, it would cost the state $165 million a year. The proposed fuel taxes would bring in an extra $302 million.
The proposal is something to consider. It is at least an acknowledgement that Mississippi is being short-sighted by spending billions on a first-class highway system but then refusing to pay for the necessary upkeep.
The real question, assuming the extra fuel tax revenue would be used on roads and bridges, is what would be cut from the budget when the 4 percent income tax’s $165 million goes away. The Legislature has struggled for a few years now to get spending in line with revenues, and losing that much tax revenue would make a difficult problem a little worse.
A decade after The Great Recession, the state economy has not yet turned upward. Though it is going to happen one day, and it will lead to higher tax revenues, there’s still no sign of things getting better.
The straight line that the state needs to get between the two points is a clean increase in the gasoline tax — without any corresponding tax cuts elsewhere. It’s worth noting that the proposed increase would raise most of the $350 million per year that the pro-Republican, pro-business Mississippi Economic Council says the state needs for extra highway maintenance.
In all honesty, prospects for the tax swap idea do not look appealing.
It’s hard to see 60 percent of lawmakers, plus Gov. Phil Bryant, getting on board with such a plan. They remain in search of that elusive straight line, though it is staring them in the face.