March 26, 2012
"Politicians and The Price of Gasoline"
Last weekend I was honored to be a judge at the National History Day competition. Why is it that Middle School kids understand what adults don’t: that you can learn from history and, hopefully, not repeat the same mistakes? Case in point, the tax on gasoline.
As gas prices push toward the $5 per gallon mark, politicians are trying to give the impression of doing something they cannot do: get prices back down. Politicians don’t set gas prices, the free market does. But sometimes, in their haste to appear engaged, the pols do more harm than good.
Obama speaks in Oklahoma, saying he’ll fast-track the southern portion of the Keystone pipeline, even though the White House has no say on the already approved project. It’s political grandstanding, but harmless enough.
But in Hartford when the D’s and R’s get together and agree to mess with gas taxes, watch out. This is no more than bipartisan pandering to motorists, which will end up hurting both drivers and the users of mass transit. Here’s the story.
In Connecticut we pay about 49 cents a gallon in taxes… 25 cents in regular taxes and the balance in the Gross Receipts Tax paid by wholesalers and passed along to us at the pump.
The lawmakers want to put a cap on the Gross Receipts Tax for about a year, savings us about 1.7 cents a gallon. That’s right… less than two cents.
Pennies in savings, but at what cost? Do lawmakers forget where the gas taxes go… and what happened the last time they cut gas taxes when Rowland was in office?
Here’s the math: for every penny a gallon collected in gas taxes, $15 million goes into the Special Transportation Fund to pay for highway and bridge repairs, salt for winter roads and subsidies for mass transit, taking cars off the road.
That fund is already in trouble and could run out of money in two years, leading to talk about finding new sources of revenue… like tolls. A political stunt like this gas-tax cap will save the average motorist pennies, but leave our highways in disrepair and push bus and train fares ever higher.
Even at $5 a gallon, gas in the US is cheap compared to the rest of the world. Yet, we drive the biggest and least fuel efficient cars and moan at the cost. Why do Americans think they have a God-given right to cheap gas?
Sure, gas in New Jersey is cheaper. But they have tolls on their roads. Pick your poison… taxes or tolls… because there is no free ride.
What’s driving gas prices higher is not state taxes but Wall Street speculation and geopolitics. Why not do something to regulate investors betting gas prices will go higher and, in effect, making them do just that?
And when (not if) Israel attacks Iran and the Straits of Hormuz are closed, choking oil deliveries and sending gas to $8 to $10 a gallon, do lawmakers really think that a two cents a gallon saving in state gas taxes will mean anything except for less spending on our roads and rails?
Next time you’re driving on I-95 and wonder why the potholes aren’t filled or worry if the bridge you’re on might collapse, thank your elected officials in Hartford for their short-sighted penny pinching.