State lawmakers are getting ready for Wednesday, when they’re unexpectedly coming back into session to vote on a 90-day gas tax suspension championed by Republican candidate for governor Vivek Ramaswamy. Democratic candidate Amy Acton was the first to call for a gas tax holiday last week, with Ramaswamy following a few hours later with a more detailed plan to make it a reality.
House Bill 1019 and Senate Bill 475 have been introduced to suspend the 38.5-cent state tax on gasoline and 47-cent state tax on diesel for 90 days. That’s estimated to cost $726 million, and both bills say the money to cover it would come from the state’s general revenue fund, not Ohio Department of Transportation money as initially suggested – a proposal Gov. Mike DeWine opposed as "a very, very bad idea.”
The bills also said gas stations have to pass the benefits on to the consumer, which would mean a 15-gallon gasoline fill-up would cost about $5.77 less, and $70.50 cents less for 150 gallons of diesel.
Many economists have said gas tax holidays provide limited relief to drivers while draining money needed for infrastructure repairs.
Rob Moore is the principal at Scioto Analysis, which has done research that's been critical of several conservative policy positions. The group conducted a study in May, when a bill to suspend the gas tax holiday was first introduced in Ohio.
“We surveyed about 19 economists and most of them were skeptical. Eleven of the 19 said that a three-month suspension would not provide meaningful financial relief. And 15 of the 19 said that long-term benefits would not outweigh the costs of reduced infrastructure funding," Moore said in an interview. "There was a little bit more disagreement about who would actually get the tax savings. But the basic takeaway was that consumers would probably get a little bit of relief, just not necessarily enough to make this an especially effective policy."
Even conservative organizations have questions. Buckeye Institute has questions. Senior research fellow Greg Lawson was concerned about the initial plan to dip into the state’s rainy day fund, and said the gas tax suspension can’t be a long term thing because there’s no funding for it.
"We recognize the pain points that are out there, the need to offer some relief to folks, but the big thing is going to be to make sure it's done as fiscally responsibly as possible," Lawson said in an interview. "As we look going forward, there could be some stormy, stormy times ahead going into the next budget cycle. We don't know what the economy's going to look like, but there's lots of challenges out there, and the revenue's been coming in pretty good right now, but that may not be the case next year."
The right-leaning Tax Foundation was direct in its concerns in a study in April. The authors wrote: "In a time of political and economic uncertainty, drivers should be aware that these sorts of gimmicks can be economically harmful. Pausing fuel taxes makes funding roads and highways more difficult while doing nothing to address the underlying issues driving prices upward."
Whichever bill moves would have to get 2/3 of both chambers to pass as emergency legislation. That's 66 votes in the House and 22 in the Senate, where there are 24 Republicans.
Speaker Matt Huffman (R-Lima) said Democratic support will be needed to pass it in the House, where there are 65 Republicans. House Minority Leader Dani Isaacsohn (D-Cincinnati) has suggested the $600 million in unclaimed funds appropriated in the budget for the owners of the Cleveland Browns for a new domed stadium in Brook Park. That idea got an audible laugh from Huffman at a press conference last week.
