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Don't Laugh - A Gas Tax Is Needed Right Now

Category: Economy
Posted: 12/14/15 13:00

by Dave Mindeman

In the big scheme of things, nobody thinks about this anymore. But I am going to try this one last time.

We need to raise the gas tax.

Conservatives will laugh. Liberals will say it's impossible. But the argument can be made that there is no better time or a more urgent need.

Last Friday the Dow dropped 300 points. Why? They were worried about the oil glut. Funny how the big money people get crazy when oil prices rise and when they decline. What exactly do they want? But, getting back to the point, there is an oil surplus at the present time. Gas prices have dipped to their lowest point since the 1970's...(and we did it without Michele Bachmann, I might add...) The North Dakota shale field is shutting down because it isn't profitable to produce when this price is so low. The Arab Oil Cartel continues to pump with abandon trying to force competitors out and manipulate the market. ISIS is dumping oil on the black market and Russia's economy teeters because so much of it depends on oil.

So what does this mean? If the past is any indication, it means Americans will be driving more and buying bigger cars. Which will be a bit ironic since we just made a pledge to reduce carbon emissions by a significant quantity in the Paris accords. A glaring problem with all of that is that we will be driving more on infrastructure that is crumbling.

So in the midst of this economic turmoil, there is a window (a temporary one) of opportunity that could bring in revenue to fix infrastructure in Minnesota by raising the gas tax. We could fund that bipartisan agreed upon need for MNDOT funding of its projects.

The Republican House has shown their derision for a gas tax. So much so, that Governor Dayton and the Senate have already decided it is futile.

But what is the Republican solution? Raiding general fund money targeted for other needs and then borrow the rest. Seriously, does that make sense in a year of budget surplus and with gas prices providing a golden opportunity?

A gas tax at the current time would bring in transportation funding and hopefully reduce gas consumption, at least marginally. This window could close at any time. The Middle East is unstable and oil production could be a target in war or the Cartel could shut everything down again. Yes, the US can now supply more of its needs, but once we start shutting down production capacity, it will take some time to ramp it up again.

So we really need to act now. Fund and fix what we can as soon as possible. A 25 cent gas tax increase would still leave gas prices below what they were last year at this time. Think of the road and bridge projects we could fund with that increase.

And yes, like I said, that could turn the other way....so I would suggest that the gas tax would have to be acted upon each and every year. The tax could be adjusted or eliminated in every legislative session. That would add a lot of politics to the situation - which could be detrimental. But it would also give flexibility that is probably needed.

The Republican House version of transportation funding is patchwork nonsense. You shouldn't be taking money away from budget needs and you most certainly should not be borrowing...it is absurd.

Gas taxes have always been the way to fund transportation. They are user fees. And yes, it is a regressive tax but taking money from other needed projects in a budget seems just as regressive to me.

Gas taxes are not going to raise as much revenue in the future. As more and more people move to hybrids and electric cars and more public transportation develops, gas taxes will cease to be a reliable form of transportation funding.

That window is available now. And the need is now.

Let's raise the gas tax now.
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