Ohio's newly increased gas tax will boost local road repairs

Money from Ohio’s newly increased tax on gasoline and diesel fuel won’t start pouring in until October but local jurisdictions are already thinking about how many more roads they can repave and repair with the new money.

“I think every mayor across the region is probably doing a cartwheel about that money,” said Dayton Mayor Nan Whaley.

The tax on gasoline will go up by 10.5 cents per gallon on July 1 and diesel fuel taxes will increase an additional 19 cents per gallon.

The city of Dayton will receive the largest increase in this region in road repair funds it receives from the state of Ohio, according to a Dayton Daily News investigation. In fiscal 2020 Dayton’s annual motor fuel tax payment from the state will grow by $2.45 million to a total allocation of $6.4 million, according to a Dayton Daily News analysis of funding estimates provided by the Ohio Department of Transportation.

MORE ON THIS STORY: Here's how much money your community will get from the higher gas tax

The additional funding is enough to pave about 30 lane miles a year of the city’s 1,600 lane miles of roads and alleyways - if the city chooses to use it entirely for repaving - said Diane Shannon, director of procurement, management and budget for Dayton.

Whaley and other local officials said area communities have fallen behind on roadway repairs over the past decade.

“That period of time with the state cuts and the Great Recession were hard on our streets,” Whaley said.

She said the city couldn't afford to resume repaving streets until voters approved a 0.25 percent income tax increase in 2016.

The fuel tax can only be used for road and bridge infrastructure and the additional tax will be collected starting on July 1, when the state’s fiscal year 2020 begins. In the first fiscal year the state is projected to receive $1.64 billion in total fuel tax revenues, a 38 percent increase over current revenues. Counties, cities, villages and townships are projected to receive $962.8 million, which is 64 percent more than they receive now.

“It really is in some respects bigger for the local jurisdictions than it is for the state highways because they went so long without any kind of help,” Ohio Gov. Mike DeWine said on Thursday during an interview with this publication.

“They’re the ones who were really really hurting,” DeWine said. “If you look at the money county-by-county, village-by village this is a real spike up in money that’s going to enable them to do some significant bridge work and highway work.”

DeWine signed the state’s transportation budget bill - which included the gas tax increase - on April 3. The fuel tax increase is expected to generate about $828 million in additional annual revenue statewide and is the first increase in the state fuel tax since 2005. The federal gas tax remains at the amount it was set in 1993 - 18.4 cents a gallon.

Officials at local counties, cities and townships said they are beginning the process of deciding specific uses for the new money. Ohio Department of Transportation officials said the new money will help put its delayed road and bridge projects in the Dayton region and across the state on the front burner.

“It’s all about making up for part of the inflation we’ve had,” said Montgomery County Engineer Paul Gruner. He said the county also had to focus on bridges at the expense of paving projects in recent years.

“So we’re going to be putting quite a bit more into paving for the next couple of years because we’ve had to cut back on that,” Gruner said.

The City of Xenia plans to “substantially expand” it’s roadway repair programs, said Lee Warren, public relations coordinator for the city. The city normally spends $500,000 to $800,000 annually on streets and will get an additional $533,617 from the new tax in fiscal 2020.

“The additional revenue will be used for roadway maintenance and rehabilitation and specifically will be directed to capital items like resurfacing and maintenance items like repairing potholes,” Warren said.

Miami County’s allocation of $1.53 million in additional money will pay for about 18 miles of paving and the current plan is to focus on that, said County Commission President Gregory A. Simmons.

“The additional money will help restore our paving program back to what it was,” said Greene County Engineer Bob Geyer. “Inflation had eaten into the funds we had and we had to cut back on hot-mix asphalt and do more chip seal and micro surfacing to keep our mileage where we wanted it, around 30 miles per year.”

In Montgomery County’s Miami Township an independent audit showed the township needs to spend $1.1 million annually on resurfacing, but it currently is spending about $350,000, said Dan Mayberry, director of public works.

The gas tax will add $204,162 in money for streets and bridges for a total allocation of $397,497 in fiscal 2020.

“This increased revenue will certainly help the township in our continuing efforts to resurface our roadways, but we have a long way to go,” Mayberry said.

The state gas tax increase followed warnings by Ohio Department of Transportation Director Jack Marchbanks about the safety risks posed by poorly maintained roadways and bridges in the state.

“The passage of this highway bill is clearly going to save lives. There’s just no doubt about it,” DeWine said.

He said good roads and bridges also help the economy.

“They provide access for customers, supplies and products,” said Erik Collins, director of community and economic development for Montgomery County. “Infrastructure is just as important for manufacturers and logistics companies like Fuyao and Chewy.com, as it is for the neighborhood pizza restaurant and our taxpayers.”

Warren County Commissioner Dave Young said the money will help the county keep up with roadway improvements needed to handle booming residential and commercial development in places like western Turtle Creek Twp.

He said maintaining roadways and bridges “is not a partisan issue. We all use them. We all need them.”

In recent years the state has relied on borrowed money to cope with a lack of new funds and debt service on those bonds will cost $390 million this year, said Matt Bruning, press secretary for ODOT. DeWine said that borrowed money helped the state with it’s projects but local jurisdictions did not have access to that revenue to do their roadway work.

“We had a huge structural deficit that was hidden by the borrowing that we’d done in the last eight years. We can’t borrow anymore,” DeWine said. “And the reality is our roads were going to continue to fall apart and continue to degrade unless we did something. I’m grateful that the legislature did it.”

The Dayton region saw a major roadway project completed when the state finished the $299 million I-75 road modernization project in 2016. And the state has already begun the U.S. 35 “superstreet” project at Factory and Orchard road intersections.

Credit: Courtesy NCDOT

The new funding could allow bridge projects on U.S. 35 in Preble County and U.S. 42 in Greene County to be completed sooner, said Brian Cunningham, ODOT District 8 spokesman.

DeWine said the money will also enable the state to address safety and other issues at about 150 intersections and interchanges identified as “safety priorities,” including some along state routes 201 and 202 in Montgomery County and state route 123 in Warren County.

The change permanently boosts the state’s gasoline and diesel fuel tax from 28 cents per gallon to 38.5 cents per gallon for gasoline and to 47 cents per gallon for diesel fuel.

Owners of electric vehicles will pay a fee of $200 per year and hybrid vehicle owners will pay $100 annually. Revenues from those fees are expected to be about $2.6 million annually, said Bruning.

The existing motor fuel tax is split, with the state getting 60 percent and local jurisdictions 40 percent. The tax increase gives the locals a 45 percent share to the state’s 55 percent.

Each Ohio county gets the same amount of gas tax funding regardless of size because counties can levy license plate fees to get money for roads and bridges, Bruning said.

The total increase for counties from the new tax is $1.53 million - for a total fiscal 2020 motor fuel tax allocation of just under $4 million each. That ranks the four Dayton region counties — Montgomery, Greene, Warren and Miami — second after the city of Dayton for total gas tax revenue in those counties.

Kettering ranks third, with a $1.2 million increase for a total fiscal 2020 allocation of $3.2 million. Beavercreek is fourth with nearly $1.1 million in new money that boosts that city’s total 2020 motor fuel tax revenue to $2.8 million.

“Well-maintained infrastructure is central to our efforts to attract and retain high quality jobs,” said Kettering Mayor Don Patterson. “Infrastructure is also critical to the city’s responsibility to provide municipal services, particularly police and fire.”

“I can assure Kettering residents that the additional $1.2 million in revenue from the gas tax increase will be spent on the roadway improvements they desire,” Patterson said.

Beavercreek and Trotwood both have renewal levies for their streets on the May 7 ballot and city managers there said they believe voters will approve the levies because the levy money has been well spent, allows them to leverage additional grant dollars for road projects and is needed in addition to the increased revenue from the gas tax.

“I think residents realize there is a need for more, and this (gas tax increase) will help offset us asking for more in the future,” said Beavercreek City Manager Pete Landrum. “We definitely will put it to tremendous good use.”

Dayton region state legislators - How they voted on the increased gas tax

Voting yes: State representatives Jim Butler, R-Oakwood; Sara Carruthers, R-Hamilton; George Lang, R-West Chester Twp.; Scott Lipps, R-Franklin; Rick Perales, R-Beavercreek; Phil Plummer, R-Butler Twp.; and Paul Zeltwanger,R-Mason; and state senators Bill Coley; R-West Chester Twp.; Bob Hackett, R-London and Peggy Lehner, R-Kettering.

Voting no: State representatives Niraj Antani, R-Miamisburg; Bill Dean, R-Xenia; Candice Keller, R-Middletown; Kyle Koehler, R-Springfield; Jena Powell, R-Arcanum; J. Todd Smith, R-Jackson Twp.; Fred Strahorn, D-Dayton; Nino Vitale, R-Urbana; and state senator Steve Huffman, R-Tipp City.