Delaware gas tax pitch; a line in the sand for Republicans?

Governor Jack Markell is pitching a 10 cent tax hike for each gallon of gasoline sold at Delaware pumps. Doug Rainey, editor of Delaware Business Daily, looks into the political implications.

Here is Doug’s Essayworks column.

It has taken some time, but the Republican minority in the Delaware General Assembly has a hot button issue for 2014.

It comes from Gov. Jack Markell’s proposal to raise the gas tax by a dime in an effort to fix a long-running problem with transportation funding. The proposal is also being touted as a way to help the economy by spurring construction employment. The proposal has a broad base of support from the construction community, business and organized labor.

But as my late mother would say in one of the colorful expressions from her home state of Tennessee, Republicans and some Democrats are “agin’ it.” The weekend Senate Republican newsletter feasted on the topic by quoting outraged motorists, while offering some ideas that are worth considering.

It’s a wise move politically for a party that has been overwhelmed by changing demographics, one statewide office holder, no strong gubernatorial candidate and the disastrous candidacy of Christine O’Donnell.

Still, resentment of the gas tax runs deep in the state, a situation fueled by government inaction. It’s a byproduct of a governing style characterized by having out of staters pay for many of our bills by way of abandoned property, incorporation fees and I-95 tolls. The result has been no sales tax as well as low property and gas taxes.

Unhappiness is slow to surface with other the taxes. The property tax bill comes once a year and the income tax is largely paid through withholding. But every day, we drive by convenience store gas station and see the sharp spikes in prices. The declines are more gradual and far less memorable.

Anger over the highly publicized scandals involving the Delaware Department of Transportation add one more reason to be “agin’” the fuel tax increase.

The reality is that Delaware gas taxes are low when compared to many other states as the Transportation Trust Fund moves toward a day of reckoning.

Delaware residents pay less than a quarter a gallon in state taxes for gas, compared to about 42 cents in Pennsylvania and 27 cents Maryland. New Jersey taxes are much lower at 14 cents, but roads are deteriorating at a fearful rate .

Even more troubling is the fact that transportation salaries have been paid out of the trust fund, which is supposed to pay for projects. Inflation and more fuel efficient vehicles have done further damage. The ability to even keep up with a low rate of inflation disappeared long ago.

Add to the mix, the fact that the proposed state budget would apparently borrow $40 million to balance the budget out of the trust fund, with the gas tax plugging the gap. Democrats are distancing themselves from the situation and Republicans have some new-found power.

To their credit, many Republicans realize the enormity of the problem and have come up with some suggestions that include chopping $40 million out of the $3.8 billion state budget and not borrowing from the trust fund to plug the gap. Another proposal would cut 2 percent off the budget across the board.

The proposals would buy some time to fund transportation short term, but do not represent a long-range approach to deal with a trust fund that at some point will not be able to fund new construction or even needed maintenance.

It is possible Markell realizes that a 10-cent increase is not politically possible in an election year and is simply advancing a bold proposal in hopes of getting an increase of a few pennies or moving an increase through the General Assembly next year.

A wise approach would be to work to move transportation salaries to the general fund, while indexing the fuel tax annually to the rate of inflation. Phasing in a gas tax increase over a period of years would reduce the pain.

It may be too much to ask that legislators exhibit a degree of courage during election year, but when the grandstanding ends, the state is still left with the problem of inadequate roads and bridges. The downstate situation is made worse by the need to improve roadbeds that were a product of a less busy farm to market era.

Pennsylvania, a state with a conservative Republican governor, faced up to the problem in a limited way. Delaware should do the same.

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Doug Rainey is the editor of the Delaware Business Daily. Email Doug at drainey@delawarebusinessdaily.com  or follow him on twitter: https://twitter.com/DougRaineyDe