EDITORIAL: Government should watch state gas prices

Lawmakers in many states are looking to lower the price of gasoline via the suspension of their state’s gas tax. As it stands now, every time a person fills up his or her tank, a certain percentage of the overall price paid is comprised of federal, state and local taxes. Thus, ultimately, the price of gasoline is as dependent on government taxation as it is on how much a barrel of crude oil costs.

On the surface, such an idea seems like an innovative way to keep costs down. The government suspends the tax for a month or two, until the fall-out from Katrina can be better accessed, and then it can be reinstated. The state takes a loss, but does so for the benefit of its citizenry.

The problem, however, arises when one considers what most states do with their gas tax money. Currently the federal government matches whatever money the state takes in at nearly a 4-1 ratio, which the state must then use on highway construction and maintenance. Thus, if the state stops collecting, say, $1 million in taxes, they ultimately lose out on $5 million – their own $1 million and the $4 million the federal government would have provided.

Of course, since Ohio is not one of the 13 states currently looking into these tax cuts as an option, this editorial board should have little room for complaint. However, the fear is that if other states don’t collect taxes and then find their own highways falling into disrepair that we will find our national infrastructure on the decline. This will create problems in shipping of just about every item and, more importantly, state governments would petition the federal government for extra aid.

If the latter situation were to play out and the federal government were to give aid to a state in need, then, ultimately, the good people of America would pay for the mistakes of the people in one of 13 other states. Essentially, Ohioans would pay for the highways in Georgia.

This editorial board is at a difficult impasse. We want to uphold the state’s rights to tax as they please but also acknowledge that current policy has involved the federal government in state rights. As a result, the federal government has a vested interest in the state’s taxing decisions. It appears that the best answer would be to enact a federal bill now that would not permit any state to be given extra money for highway repairs or other expenses that should have been covered by the state’s gas tax if the state passes even a temporary moratorium on their gas tax. As such, the federal government hasn’t made any direct claim to any one state’s taxing rights or policies but has protected the financial integrity of the entire nation’s citizenry from the actions of one part of the union.

The gas tax issue has made at least one thing clear: States can impact one another with their policy-making decisions, and it is the federal government’s job to ensure that the nation as a whole is not paying for the folly of a few.

The above editorial is the consensus opinion of the Daily Kent Stater editorial board.