Lawmakers deliver complex mess of formulas, percentages for Ohio gas tax

Ohio

For weeks, lawmakers have been touting the line “1 cent of gas tax increase generates $67 million and it does for the state” but depending on where in the state you’re being taxed, the return on investment for that area will be different.

The gas tax Ohioans will be paying at the pump come July 1 will not be shared equally between cities, villages and townships. Each will get a portion of the gas tax based on two different formulas. 

The first formula applies to the $0.28 gas tax we are already paying and takes into account the number of vehicles and miles of road.

The second formula applies to the $0.105 increase just passed in the transportation budget. That formula comes from before the current formula was put in place, sometime before 2003.

No one at the Statehouse Thursday could provide a straight answer about why the two formulas are being used or what the benefit of doing this is.

The complication was discovered when the Ohio Department of Transportation was attempting to calculate the projected budget on Wednesday.

A preliminary report of what counties may expect to see was released but had to be recalled when the issue was discovered.

Additional complexity is added to the distribution calculations because lawmakers decided to split the $0.105 increase differently than the $0.28 tax is currently being split.

Right now, ODOT gets 60% of the gas tax and the remaining 40% goes to everyone else.

When the new gas tax takes effect on July 1, ODOT will get 60% of the first 28 cents and 55% of the final 10.5 cents.

Regardless, once everyone figures out how much they should be getting, they will be able to begin planning on how to use it.

According to ODOT Director Jack Marchbanks, the first thing on their list is to address some of the most dangerous intersections in Ohio.

The list of 150 intersections is broken down into a top 50 for rural, urban and suburban areas.

Marchbanks says they will start with number one on the list and begin working their way down.

“Many of those very top priorities will be looked into first and that we’ll be moving forward on. In fact, in May we’ll be authorizing the design for safety fixes for those very top projects in rural, urban and suburban areas,” Marchbanks said.

Large projects, like those that would relieve congestion in Columbus and Akron, may be delayed until funding can be secured as Marchbanks predicts they may fall further down the priority list.

When it comes to understanding why the legislature decided to go with such a complicated way to fund transportation needs in the state, Marchbanks said he didn’t have an answer. But, he did say that when it comes time to determine who gets what from the new gas tax, it will be a collaborative effort.

“Government is never easy, but is always needed,” Marchbanks said. “So what we’re looking at here is a collaboration between the Ohio Department of Taxation, [Ohio Department of Transportation] and the Office of Budget and Management. All three agencies will be involved in calculating and divvying up the revenue that we’ve been provided.”

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