By: Sid Salter
Speaking to the Delta Council Annual Meeting in Cleveland recently, United Parcel Service chairman and chief executive officer David Abney – a Mississippi Delta native who leads the world’s largest package delivery company – strongly advocated increases in both federal and state fuel taxes to fund future highway construction and maintenance at a time when both national and state infrastructure stands in inarguable need to repair and improvement.
Mississippi’s 18.4 cents per gallon state gas tax (CPG) is a flat tax. When we paid $3.965 a gallon for gas in 2008, the tax was 18.4 CPG. When we pay $2.35 per gallon at the pump this week, the state tax is still 18.4 CPG. The only way the state takes in more revenue in gas taxes is for the volume of gas consumed to increase – and automobiles are now manufactured to require less fuel consumption that a decade ago.
The state fuel tax rates haven’t increased since 1987, the last time the state was particularly serious about improving our highway system.
The federal fuel tax is likewise 18.4 cents per gallon and haven’t changed since 1993. Neither the federal nor state fuel taxes have kept pace with inflation. Indexed for inflation, both federal and state fuel tax rates would be 31 cents per gallon and far closer to actually funding what’s needed to build and adequately maintain the national and state infrastructures.
Abney delivered his Delta Council call for higher federal and state fuels taxes while Republican Gov. Phil Bryant and Republican Lt. Gov. Tate Reeves – both of whom opposed increased fuel taxes – were sitting behind him on the stage. In the audience was outgoing Republican Central District Transportation Commissioner Dick Hall, a strong proponent of raising federal and state fuel taxes who has been publicly calling for the hikes for most of the last decade.
The 2019 Republican gubernatorial primary is finding the issue of raising the state gas tax to be a bright line issue separating the candidates. Reeves, the frontrunner, and GOP State Rep. Robert Foster of Hernando have stated their opposition to higher fuel taxes. Former Mississippi Supreme Court Chief Justice Bill Waller, like Hall, is actively calling for a state fuel tax increase to fund roads and bridges.
Waller says his support is contingent on a related “tax swap” in the form of reduced income taxes, although his exact plans for accomplishing that “swap” have not been revealed.
The GOP gubernatorial race differences on a proposed gas tax hike are interesting in that Republican President Donald Trump has floated trial political balloons supporting a federal gas tax hike to fund infrastructure.
Leading Mississippi Democratic gubernatorial contender Jim Hood has rebuked the state’s GOP legislative leadership for failing to enact fuel tax hikes but has stopped short of full support of the tax hikes by suggesting that there are other ways to fund infrastructure construction and maintenance. Details of those “other ways” have not been circulated by Hood’s campaign.
If Mississippi is like the rest of the country, the top issues in the 2019 gubernatorial race are health care and jobs, but with over 500 bridges closed and numerous state roads in need of maintenance and repair the issue of road and bridge finance in Mississippi isn’t far down that list of issues.
It’s beyond interesting that many of the same political voices who spent decades shouting down the collection of internet sales and use taxes and enacting a state lottery are now loudly claiming that those initiatives are the very reasons Mississippi should avoid higher fuel taxes.
But Abney was right at Delta Council in calling for a sustainable, highway user-driven system of funding road and bridge maintenance through reasonable increases in both the federal and state fuel taxes. Not politically popular, mind you, but fiscally sound.
What impact, if any, the fuel tax issue has on the GOP primary may well prove negligible. But it is a key difference between frontrunner Reeves and Waller, perceived to be his closest GOP competitor.