Suspended gas tax a quick fix

Mainers are understandably concerned about the recent run-up in prices for such vital commodities as gasoline and home heating oil. In a rural state like ours, alternative sources of energy are scarce and driving is a necessity for most families.

It’s also understandable that some public officials would seek quick relief for families facing hardships this fall and winter, and to look for answers close at home. Some have suggested suspending or repealing the state gasoline tax to combat or at least moderate prices at the pump.

While appealing on the surface – it would provide a quick response not dependent on foreign suppliers or even the federal government – this is the wrong answer for Maine, for a whole number of reasons.

To begin with, state motor fuel taxes are not the reason why prices have risen so sharply. The price spike that immediately followed Hurricane Katrina has dissipated, but prices are still much higher than we saw even a year ago, thanks to increased demand and tight supplies.

State fuel taxes are not the cause. Maine’s gasoline tax has gone up seven-tenths of a penny in the past year, while retail prices have spiked by almost $2 a gallon. The proportion of state taxes to the pump price is near a historic low – less than 10 percent of what it costs to fuel your vehicle. If we suspended or even eliminated the gasoline tax, we would still not come close to equaling the prices we saw as recently as last spring.

Suspending the tax, however, would have enormous consequences for Maine’s transportation program, and those consequences would affect our physical and economic infrastructure for years to come. Although this was doubtless not the intent of those advocating a gasoline tax rollback, the simple fact is that this would cripple construction projects statewide.

If the tax were suspended for even two months, it would cost the Highway Fund nearly $40 million. If that were to happen, the Department of Transportation would have to suspend or cancel all the projects it plans to put out to bid over the next 90 days.

These include 160 projects with a total value of $80 million with the matching federal money, and which are expected to create or sustain 3,360 jobs. Projects all over Maine would be affected – among them new bypasses for Gorham and Presque Isle, bridges along Route 1 in Washington County, rehabilitation of the Frank J. Wood Bridge in Brunswick, reconstruction of Route 226 to the VA Center in Togus, highway reconstruction in Lagrange, Winter Harbor and many other locations.

The state is experiencing challenging economic times. One of the best ways to stimulate the economy is by investing in our infrastructure, since $1 million invested in transportation infrastructure generates 42 jobs. The average construction job pays $18 an hour, which is considerably higher than the state’s average worker is paid. We should be finding ways to invest more in our aging highways and bridges instead of cutting back at this critical time.

The state has already cut back its highway and bridge construction program from levels that would at least maintain our current infrastructure, and the two-year transportation bond issue the voters will consider in November is only half its usual size. To top it off, gasoline tax receipts are showing a decline that began even before Hurricane Katrina, as drivers limit their trips in response to higher prices. It’s safe to say that if the state decides to suspend the gasoline tax, there will be nowhere else to find the money, and further cuts in transportation programs will immediately follow.

We should be careful before taking action for short-term benefits that will damage our long-term goals. Maine is a state that’s heavily dependent on its surface transportation network, not least in terms of its capacity for economic development. Without an improved highway and bridge network, we stand to lose out on the job-creating businesses and industries we badly need. Thankfully, reason by members of both parties has won out over the hype to avoid falling into this trap of postponing needed investment.

With the decline of the state’s manufacturing base, the construction industry is one of our few bright spots in this vital sector of our economy. And when it comes to transportation, the principal investment comes from government – your tax dollars truly at work – and there are no significant alternative sources.

Suspending the gas tax might seem like an attractive option, but the more you look at it, the more the problems we can see it would create. In Maine, we’ve never been willing to sacrifice long-term gains for quick fixes. And we shouldn’t start now.

Tim Folster is operations manager at Sargent & Sargent and is president of the Maine Better Transportation Association.