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McQuiston: The Gas Tax

02/17/12 5:55PM By Timothy McQuiston
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(Host)  Vermont Business Magazine editor and commentator Tim McQuiston suggests that the best source of funding for the repair and maintenance of our roads and bridges may in fact be found at the neighborhood gas pump.

(McQuiston) Congress is wrestling with how to fix the nation's transportation infrastructure. Needless to say, it's been political struggle.

One of the big issues is where new revenue would come from. The most obvious is the gasoline tax. But no one ever got elected, that I can think of, by promising to raise taxes, any tax. This is an election year. Don't hold your breath.

Here in Vermont, there's a similar effort among some in the Legislature to raise our gasoline tax. With government being controlled by Democrats, Montpelier would not seem to have the same political obstacles we see in Washington.

And the need in Vermont is even clearer than it is nationally. Tropical Storm Irene tore away big chunks of infrastructure and damaged a lot more. While major repairs have been done and nearly every road and bridge has been repaired, at least temporarily, there is still much work ahead. Permanent repairs need to be done, stream beds re-set, culverts upgraded and there needs to be some environmental remediation, not only because of what Irene did, but to avoid what the next storm might do. Some of our history was damaged or simply washed away. Decisions also will have to be made about that.

But there is also the pre-existing infrastructure that needed upgrades and repairs before Irene even hit town. There is ongoing maintenance needs. Irene sucked up a lot of our regular transportation budget, as did the impressive new Champlain Bridge.

So the suggestion is that Vermont raise the gasoline tax, but only the gasoline tax, to raise money to repair and enhance our infrastructure.

Admittedly, the gas tax has suffered recently because people are driving less and driving more fuel efficient vehicles. Fewer tourists haven't helped either. Gas tax revenues were down nearly 5 percent in January.

So finding the appropriate increase might be difficult. But the gasoline tax would go directly into the transportation fund to boost the generous federal match and especially help local towns recover from Irene.

The gas tax is also a bit "exported" by visitors and is somewhat invisible because it's lumped into the price. I'm guessing it could be a bit of a tough sell with gas prices creeping back up and the regressive nature of it. But all in all it seems like the logical tax to raise for this purpose and one we could handle if it comes with a strict sunset. One cent of tax raises about 3.3 million dollars.

My general thought is that the exact right time to fix a problem is right after a calamity. History shows clearly that when government fixes something fast, the fix is more effective and it costs less in the long run.

Look at the Vermont budget deficit from the early 1990s. Governor Snelling and Speaker Wright raised taxes, cut spending, got rid of the deficit and Vermont has been in a better fiscal position than nearly every other state in the nation for more than a generation.

Now is the time to do the same thing for roads and bridges.
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