Our view: Suspend the gas tax? Not a good idea
Along with taking money from needed infrastructure projects, the Tax Foundation wrote that “the savings from zeroing out the gas tax would likely be enjoyed at least in part by producers, rather than passed entirely to consumers."
Suspend the state gas tax during record high fuel prices?
It’s a bad idea, yet it’s happening in some states, including Maryland, Georgia and Connecticut. Other states are considering it. According to a poll by Politico, 72% of Americans surveyed said they are in favor of states suspending the gas tax, at least for a while, during record high gas prices.
Of course people are interested in dropping the gas tax. If the question was asked when gas cost only $2.30 per gallon – as it was just two years ago – it’s likely the survey would have produced the same answer, since some who participate in those polls might not fully understand how state and federal taxes on fuel are used to pay needed public infrastructure projects and improvements.
Thankfully, North Dakota leaders do not appear to be interested in suspending the state gas tax. According to a Forum News Service report earlier this week, Senate Majority Leader Rich Wardner, R-Dickinson, said state legislators haven’t spoken about the idea. It could happen when lawmakers return to Bismarck in January, he said, but it’s unlikely to happen before that.
Gov. Doug Burgum also appears hesitant to suggest temporarily halting gas tax collections. A spokesman from his office responded by sending an article from an entity called the Tax Foundation, which declares a halt in gas tax collections is an “ill-suited policy.”
Along with taking money from needed infrastructure projects, the Tax Foundation wrote that “the savings from zeroing out the gas tax would likely be enjoyed at least in part by producers, rather than passed entirely to consumers. … Even if savings were passed to consumers in the form of lower gas prices, it could make the misalignment between demand and supply worse — reducing taxes on gasoline could spur further increased demand for gas, and in turn, higher prices.”
North Dakota’s gas tax is 23 cents per gallon. In Minnesota, the gas tax is 28.6 cents.
For most drivers, the savings that would be seen from suspending the gas tax would likely be around $3.50 per tank of gas.
Certainly, some have bigger tanks – truckers, RVers and the like – but generally speaking, that savings would be window dressing and not bring a substantial benefit to most drivers.
Without doubt, it would be politically favorable for voters, and it would come at the cost of depleting needed savings accounts that are used to fund infrastructure projects.
According to the American Road and Transportation Builders Association, 11% of North Dakota’s 4,285 bridges are classified as structurally deficient. Of those, 97% are not on the national highway system. Further, the ARTBA notes that the state has identified needed repairs of 1,388 bridges at an estimated cost of $432.4 million.
North Dakota needs its fuel tax dollars to help pay for these necessary upgrades.