Former Gov. Kirk Fordice tried to argue Mississippi’s gasoline tax was a user fee. But now, with gasoline nudging or topping $4 a gallon, some motorists see it as an abuser fee.
In Mississippi, 37.2 cents per gallon — 43.2 cpg for diesel — of what is paid at the pump are state and federal taxes.
Mississippi’s excise tax is 18.8 cpg on gasoline and diesel — with 0.4 cpg going to an environmental protection fee. In Hancock, Harrison and Jackson counties there is an additional 3 cpg seawall tax.
The federal tax is 18.4 cpg for gasoline and 24.4 cpg for diesel.
The 1987 four-lane road construction project began with a three-phase plan for 1,077 miles of highway segments being completed by 2001 at a cost of $1.6 billion. Those numbers were extended along with the gasoline tax that was to have been repealed at the turn of the century.
The Legislature initially promised to repeal the gasoline taxes as projects were completed and the money no longer needed.
Instead, the Legislature in 1994 made the tax open-ended and added a fourth phase that attached another 619 miles of four-lane at an estimated cost of $1.3 billion.
For Fordice, whose business was construction, said if you don’t drive, you don’t pay the tax. Fuel taxes, he said, were the financial engine for highway construction.
Mississippi Department of Transportation officials now argue that the tax revenue is not enough to sustain the highway program.
From July 2007 through May 2008, the excise tax on gasoline had brought in more than $267 million, according to Mississippi State Tax Commission figures. The excise tax on diesel brought in more than $107 million.
In 2007, Dick Hall, the central district transportation commissioner, told a Greenville audience that MDOT’s revenue has been flat while costs have increased by more than 125 percent since the 1987.
Hall said Mississippi motorists have been paying the same tax on gasoline and diesel, but fuel costs more, and inflation was not considered when the legislation was enacted. He said driving habits also have affected gasoline sales and reduced money to MDOT.
More recently, MDOT officials have predicted the budget gap will grow to $4 billion by 2016 if the funding structure is not altered.
MDOT’s own study suggested changes could include increasing the fuel tax or creating fees.
MDOT says Mississippi’s gasoline tax is the 10th lowest in the nation and because of inflation, the fuel tax is worth about 10.6 cpg gallon — about 59 percent of its original value.
MDOT said if the gasoline tax were increased to 26 cpg, the department would get another $129 million a year.
As of July 1, 2008, the average amount of tax imposed on a gallon of gasoline sold in the United States was 49.4 cpg, up 2.4 cents from January 2008, according to Washington-based API, the trade association for the oil industry.
For diesel fuel, API says the national average amount of tax was 56.4 cpg, up 2.8 cents from January 2008.
Senate Highways Committee Chairman Tom King Jr., R-Petal, said it would be difficult in the present economic and political climate to pass a gasoline tax increase.
“People just kind of cringe when you bring it up, and I don’t know if that is the answer,” King said.
King said unless some new source of money is found, MDOT could find itself doing maintenance and not building any new roads.
“We can’t do that,” King said. “Road building is one of the biggest economic development tools we have in the state for existing and new industry. They all want to know about this road and that road and how we can respond to a new industry’s needs.”
