Gas tax coalition's ‘strong message’ reflects the weakness of their position
The Kentucky Chamber of Commerce went big yesterday to “send a strong message” to Kentucky lawmakers to raise the state’s gas tax.
Speaking on behalf of a pro-gas tax coalition, the statement read:
Increasing funding to improve Kentucky’s infrastructure has been the top priority of the Kentucky Chamber of Commerce, Kentucky League of Cities, Kentucky Association of Counties, and many other organizations in a huge coalition for years now with no progress in the General Assembly.
True enough. In prior years, the Chamber and their allies couldn’t get a committee vote in the House for their legislation to raise Kentucky’s gas tax by $0.10 / gallon.
The groups are clearly concerned the gas tax hike is on the “back burner” again in 2021:
This year alone, 110 cities and counties and 14 state and local chambers of commerce have passed resolutions and written letters in support of this issue, and yet it continually has been put on the back burner.
Understand, however, the General Assembly is poised to increase investment in infrastructure this session even without a gas tax hike. According to the Office of the State Budget Director, higher revenue estimates and the use of CARES Act funds has resulted in $78.9 million in more road fund resources available in FY ‘21 and $38 million more in FY ‘22.
Reducing the sweep of road fund dollars to the General Fund could easily provide another $60-$100 million every biennium to support highway construction and maintenance. Auditing the bidding practices of the Transportation Cabinet will go a long way towards ensuring every dollar spent by the Cabinet is spent efficiently.
The Chamber, representing Kentucky’s big businesses, argues “there is no better way to work toward economic recovery and getting our people back to work than properly investing in Kentucky’s future by raising the gas tax by at least 10 cents.”
If successful, the Chamber’s gas tax hike and associated fees would add $500 million to Kentucky’s overall tax burden. Kentucky already has the 21st highest total tax burden nationally. For comparison, Tennessee and North Carolina - our competitor states - rank 48th and 33rd respectively. Lawmakers should ask the gas tax advocates to explain how adding to our already high tax burden makes Kentucky more competitive?
The Chamber’s statement wraps up with:
Without action on this issue in 2021, the legislature will have, for the fourth year, chosen not to truly act on the best way to move our economy forward.
That’s quite the Keynesian approach.
The legislature can choose the best path by choosing to leave the gas tax alone. Leaving money in the pockets of those who earned it is the right strategy to get Kentucky’s economy back up and running.