In a survey released this morning by Scioto Analysis, 11 of 19 economists indicated that a three-month gas tax suspension would not provide meaningful financial relief to Ohio residents.
Since January, Ohio has experienced the most dramatic increase in gas prices out of all fifty states. In response, members of the Ohio House of Representatives have been considering a potential three-month suspension of the state’s motor fuel tax. The tax is $.385 per gallon for gasoline and $.47 per gallon for diesel. Tax revenue from Ohio’s fuel tax most commonly goes toward funding state infrastructure.
Most respondents disagreed that a gas tax suspension would provide meaningful financial relief to Ohio residents, with 2 economists uncertain and 6 economists agreeing. Bob Gitter of Ohio Wesleyan University explained, “If you buy a tank of gas every week you would save $6. Over a three month period that would be about $80. Low-income people could use a break but $80 would not, in my view, by meaningful financial relief.” Among those who agreed, economists expressed that while a gas tax suspension may provide financial relief, the policy would likely hurt Ohio’s economy in the long-run.
15 of 19 economists disagreed that the long-term economic benefits of a three-month gas tax suspension would outweigh the long-term economic costs of reduced state infrastructure funding. According to David Brasington of the University of Cincinnati, “Gas tax holidays usually end up causing deferred maintenance, which makes roads more expensive to repair than if normal maintenance had been done. It's like skipping a few dentist visits: it will save you some money upfront, but the resulting cavities will be more expensive to repair.” Of the remaining economists, 1 economist agreed and 3 were uncertain.
9 of 19 economists agreed that more of the benefits of a three-month gas tax suspension would accrue to consumers than fuel retailers. Curtis Reynolds of Kent State University expressed, “There is some research showing that gasoline taxes at the state level have high incidence to consumers (price increases almost one-for-one with the tax) so most of the benefits should accrue to customers in the form of lower prices.” Of the remaining economists, 5 were uncertain and 5 disagreed. These economists expressed uncertainty over whether fuel retailers would pass on the entire tax reduction onto consumers under a short-term gas tax suspension.
The Ohio Economic Experts Panel is a panel of over 30 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.
