Wednesday, May 21, 2003

Gas tax bill promises cash back

Proposal pledges 95 percent return for high-population states

By James Pilcher
The Cincinnati Enquirer

Ohio, Kentucky and Indiana are about to become involved in a national fight over how federal highway construction money is distributed between states with many drivers and those with few.

Sen. George Voinovich, R-Ohio, today will co-sponsor a bill that would guarantee states with a high population, such as Ohio, get back at least 95 cents for every dollar of federal gasoline tax collected in the state.

Ohio gets back about 89 percent of its federal gas tax money. Some smaller states get back more than they pay, a system created to allow larger "donor" states help ones with small populations sustain their interstates.

The new bill could mean an additional $56 million annually for highway construction, Ohio Department of Transportation officials said Tuesday.

"Addressing this inequity will determine the extent Ohio can maintain its highway network and improve it," said Voinovich, a former Ohio governor.

"Ohio is the crossroads for America's manufacturing and agricultural industries. Built in the 1950s to serve the demands and traffic of the 1980s, Ohio's infrastructure is straining to keep up."

Ohio has the nation's 10th-largest highway system, the second-largest number of bridges and the fifth-largest volume of traffic, meaning that any additional funding would be welcomed by the state.

ODOT officials even warned that they would cut off new construction projects in four years if more money wasn't found.

That crisis was averted when the General Assembly passed a state gasoline tax increase this year, but Ohio and the Tristate are still looking at some major projects in the future.

The state is considering the reconstruction of Interstate 75 in Southwest Ohio, a project that could reach $500 million.

And the Eastern Corridor proposal, which would include several new highway and transit projects in eastern Hamilton County and western Clermont County, has a preliminary price tag of $800 million.

The new bill, co-sponsored by legislators from Indiana, Michigan and Texas, comes a week after the Bush administration released its proposed funding formula for the next six years.

There is some good news in the administration's $247 billion funding proposal, which updates the authorization law that expires at the end of September. Under that law, 2.5 cents of the 13 cents collected on each gallon of any gasoline product, including the corn-derived additive ethanol, goes into Congress' general fund and is not tied to highways.

The administration's proposal would do away with that, devoting all 13 cents a gallon to transportation.

And because Ohio is the second-highest user of ethanol nationally (behind Illinois), that would bring an additional $50 million in revenue.

But the battle will still be waged over the donor state issue.

Right now, Ohio is guaranteed 90.5 percent of what it pays in federal gas taxes (18 cents a gallon), but each year's appropriations process garners the state only 89 cents on the dollar.

That would not change under the Bush administration's new proposal.

Only six such donor states get back less than Ohio on each dollar. Indiana also gets back 89 cents, while Kentucky gets 91 cents. Estimates on how much those two states would get back under the new bill were not available.

That compares with states such as New York ($1.21 back for every dollar in), Connecticut ($1.41 back) and Alaska ($6.60 back), which are able to lobby to get more money every year.

All that points to the new bill creating a showdown over some of the highest-profile funding in Congress.

"By guaranteeing each and every state gets back at least 95 cents on the dollar, our legislation is a critical step in bringing equity and fairness to the federal highway program," said Rep. Baron Hill, D-Ind., one of the bill's co-sponsors.

"In addition, taxpayers in donor states like Ohio, Indiana and Kentucky will be getting more bang for their buck - safer roads, better bridges and a bigger boost to the economy."


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