Highway revenue bills die at deadline
by Clay Chandler
Published: March 1,2013
Two bills that create new revenue for the construction and maintenance of Mississippi’s roads and highways died last week in committee.
A bill filed by Rep. Robert Johnson, D-Natchez, would have increased the current 18 cent per gallon tax on gasoline. It died in the House Ways and Means Committee.
A Senate bill authored by Sen. Joey Fillingane, R-Hattiesburg, would have tied taxes on casino payouts to the highway fund.
Neither made it out of committee by last Wednesday’s deadline for each chamber to pass revenue bills.
The 18 cent per gallon rate was set in 1987, as part of the state’s comprehensive highway program. The taxes collected funded the construction of roads and highways. Central District Transportation Commissioner Dick Hall has said the past several months that the funding mechanism did not provide for maintenance of the roads it built.
That combined with the cost of road construction increasing and fuel efficient vehicles causing consumers to purchase less gasoline has left the highway system in a state of disrepair, Hall told the Mississippi Business Journal last fall. The gasoline tax, Hall said, should not be totally flat, but should have some mechanism that relies on a percentage of the wholesale price of gasoline.
“Back then, gas cost a dollar,” Hall said last fall. “If we had made it a percentage we would not have this problem now.” He said the 18-cent rate passed in 1987 translates to 10 cents today.
Johnson’s bill would have tied the fuel tax increase to the wholesale price of gasoline. On top of the 18 cents per gallon, the legislation would have tacked on an amount equal to 6 percent of the wholesale price of gasoline, starting next January. The measure called for the increase above the 18 cents per gallon to be recalculated every six months.
Fillingane’s bill would have earmarked a portion of taxes collected on casino payouts to the state highway fund. Half of any amount over $35 million the state collected in a fiscal year would have gone toward highway maintenance. The rest would have gone into the state’s general fund. That bill died in the Senate Finance Committee, of which Fillingane is chairman.
Mike Pepper, executive director of the Mississippi Roadbuilders Association, said his organization supported both bills, but said Johnson’s was “cleaner” because it tied road usage to how much fuel tax a consumer paid.
“What state agency or groups are still running on a budget they had crafted in 1987?” Pepper said in an interview last week. “Very few. It’s finally catching up. The cars are getting better gas mileage, construction costs are doubling and tripling, more than that in some instances. It’s come to a head.”
Pepper said a handful of states have enacted some kind of mechanism to fund highway maintenance, whether it’s increased vehicle registration fees or a straight tax increase. “The fuel tax is the simplest way to do it, but we’ll look at anything that’s presented.”
He also knows any kind of revenue generation will have an uphill battle to fight at the Capitol.
“And what’s also important, is that in the past a lot of road construction has been funded with bonds,” Pepper said.
The Legislature did not pass a bond bill during the 2012 session, the first time that’s happened in several years. Lt. Gov. Tate Reeves, who said last year’s proposals were too large and funded things that should have been paid for up front, has said he would consider a bond bill “reasonable and rational in size” this session.
“I don’t think there’s a member of mine that would not disagree with MDOT becoming more efficient,” Pepper said. “But you can save all the money in the world, but it’s still not a highway program. You could save millions of dollars, but we’re talking about hundreds of millions of dollars.”
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