A 6-cent gas-tax increase over three years that the Ohio legislature passed last spring is stirring controversy around the state.
The disagreement is whether to implement a 1-year delay on the 2-cent increase on gasoline tax slated for July 1, with legislation proposed by Rep. Tim Grendell, R-Chesterland.
The first tax increase, which was July 1, 2003, will continue to increase by 2 cents every year until July 1, 2005, if the legislation does not pass.
If the bill passes, it would push the increase slated for 2004 to 2005, and the increase slated for 2005 to 2006, said Beth Vanderkooi, Grendell's spokeswoman.
The tax does not hurt my business because of the location
said Kevin Goldsberry, owner of Dale's BP, 50 N. Court St. But if I owned a business near the border of West Virginia or Kentucky I would be worried about people driving across the border to get their gas for 6 or 8 cents cheaper.
Reasons Grendell gives for trying to delay the tax increase include President Bush's recent decision to cancel the proposed 5 percent federal tax on gasoline, OPEC's decision in early April to cut production and an increase in Ohio's sales tax, Vanderkooi said.
The 2-cent tax increase would come at a time when gas prices are already inflated, Vanderkooi said.
Citizens are getting fed up of getting nickeled and dimed to death. Five dollars here and $5 there - pretty soon we're talking about a family's disposable income Vanderkooi said.
But David Finley, managing director of the Ohio Construction Information Association, said the tax break would hit the economy at a vulnerable time.
To delay putting this money
which would really amount to $5 per driver
per year
into the economy would really be doing the wrong thing
Finley said. We would be hurting the state's overall economy by hundreds of millions of dollars.
For every $100 million generated by taxes, 3,500 new jobs are created in Ohio. Most of those jobs are not construction jobs; they are jobs generated by the highways that attract business, Finley said.
I think it's more of a symbolic gesture against all taxation
because it really is a small amount of money. We're talking about giving up less than a pizza for lots of people to keep their jobs and lots of jobs to be created
Finley said about Grendell's proposed delay.
The nationwide average for all gasoline grades, including taxes, is $1.86 per gallon - up about 3 cents from April 9, according to the Lundberg Survey of 8,000 gas stations nationwide.
Since Dec. 19, the average gas price has risen almost 35 cents, analyst Trilby Lundberg said, breaking all-time record highs for the past two months.
But Lundburg said the trend is not likely to continue for long because the peak summer travel season is approaching.
The tax increase is not likely to affect the economy of Ohio much, regardless of whether or not it is delayed, said Khosrow Doroodian, Ohio University economics professor.
-The Associated Press contributed to this article
17
