Thursday, June 22, 2000

Ohio, Kentucky can't cut gasoline sales tax

By Howard Wilkinson
The Cincinnati Enquirer

        Ohio Gov. Bob Taft and Kentucky Gov. Paul Patton couldn't do what Indiana Gov. Frank O'Bannon did Tuesday — temporarily eliminate the state sales tax on gas — even if they wanted to.

        Neither governor has a sales tax on gasoline to eliminate.

        And neither state is about to reduce excise taxes on gasoline, which pay for highway, road and bridge construction and maintenance projects.

        All three states have sizeable excise taxes, but Indiana is the only one that also applies its state sales tax to gasoline sales.

        “We've been better off all along in Ohio on gas prices because we didn't have a sales tax in the first place,” said Scott Milburn, spokesman for Mr. Taft.

        The Indiana governor announced Tuesday a 60-day suspension of the 5 percent state sales tax on gasoline sales, which raises about $11 million a year for the state's general operating fund.

        But Mr. O'Bannon, who is in a competitive re-election campaign this year, did not touch the state's 15-cent per gallon excise tax, which generates revenue for Indiana highway projects.

        Ohio has a 22-cent excise tax on every gallon of gasoline sold.

        Last year, that tax generated $1.37 billion for state highway projects.

        Kentucky has an excise tax of 16.4 cents on every gallon.

        Ohio's legislature has the power to lower the excise tax, but both Mr. Taft and Ohio Senate President Richard Finan, R-Evendale, say that is unlikely.

        “We would be putting every highway project in the state in jeopardy,” Mr. Finan said.

        Proceeds from the excise tax, Mr. Finan said, are used to pay off bonds used for highway projects.

        Mr. Milburn said Mr. Taft supports congressional and Clinton administration investigations into skyrocketing gas prices. But Mr. Finan said he doubts such investigations will do any good.

        “You can investigate until the cows come home,” he said. “I don't see much that can be done about it, not in the short run.”

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