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Is Ohio Reducing Fuel Taxes?

Is Ohio Reducing Fuel Taxes?
Ohio lawmakers are trying to find ways to cut costs at the pump by reducing fuel taxes.
  • Post category:News

Ohio lawmakers are trying to find ways to cut costs at the pump by reducing fuel taxes. Ohio’s average price per gallon rose to $4.08 on Monday, March 15, 2022. With gas prices setting record numbers every day, it’s good to see that policy makers are thinking outside the box. Reducing fuel taxes could prevent the need for more oil drilling. First impressions of a “Gas Holiday” sound amazing, and local residents don’t think it can come soon enough.

First impressions are one thing, but once you write down the numbers, a “Gas Holiday” is more like a Griswold family vacation than a dream vacation. When you add up state and federal taxes, that only accounts for roughly 15% of the price of gas. A 15% sale on gas isn’t exactly a fire sale and the remaining costs of distribution, refining, and price of crude still need to be paid. Not to mention, the loss of tax revenue for city and highway road maintenance.

Ohio’s Proposal

Ohio raised the fuel tax in 2019 from 28 cents to 38.5 cents per gallon to help raise funds for Ohio’s crumbling infrastructure. It was described as a funding crisis and helped pay for improvements to the city of Cleveland and the surrounding areas. Removing this tax could put a halt on current projects still under development and future improvements planned down the line.

Governor Mike DeWine was presented a bill that would reduce the gas tax for the next five years. He’s skeptical that this bill will do anything to help. He’s not the only skeptic as seventeen other states have all had some sort of Fuel Tax Bill proposed in their states and even a federal bill floating through congress.

Is Removing Fuel Taxes Foolish?

When it all boils down the governor, in this particular case, isn’t wrong. Ohio’s fuel tax is higher than the average state after the 2019 increase. That doesn’t mean removing the tax will bring relief at the pump. The price of crude oil will continue to go up and even with no fuel tax, the price of gas will rise. If a person drove 15,000 miles with a vehicle that ran 25 mpg, their fuel taxes would be around $231. If the state gas tax was reduced, they would pay $150 in fuel tax. That’s a savings of $81 a year. That’s not even enough to fill up an SUV.

The price of fuel is something that has been rising considerably even before the Russian invasion of Ukraine. GasBuddy.com predicted gas prices would top $4 a gallon years before Russia. This means that even if Russian oil supplies opened up tomorrow, the price of gas is still going to skyrocket.

Do The Experts Agree?

Removing or reducing fuel taxes might provide a temporary solution but in the long term, it’s not good for the city of Cleveland or the state of Ohio. Tax revenue is crucial to keep our city progressing and thriving. Cleveland has taken a huge step forward in recent years and it would be a shame to have to take a step back.

The rising cost of fuel is something that needs to be considered but reducing fuel taxes is obviously not the answer. Economists all agree on that, but they have yet to agree how to reduce the price for local consumers. Some states may try to enact some sort of “Gas Holiday” with Florida and Georgia at the forefront at closing a deal. For now, if you need to move your vehicle cross country, it may be cheaper to find an auto transport company like Cleveland Car Transport to move your car for you. They’re the number 1 auto shipper nationwide.

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