West Virginia Democrats and Republicans are fighting over the state gasoline tax.
Democratic lawmakers are pushing for a temporary suspension of the 35.7-cents per gallon tax to ease the burden on West Virginia motorists who are confronted with gas prices of over four-dollars a gallon.
A one-month reprieve would reduce by about $35 million the amount of money collected from the gas tax. That money goes toward the state’s highway construction and maintenance program.
Senate Minority Leader Stephen Baldwin (D, Greenbrier) said the state can fill the gap with money from the Governor’s Contingency Fund or out of surplus funds.
“We want to do this responsibly,” Baldwin said. “We can pause the gas tax while also fully funding the state road fund. This is just giving the people back home some of their own money when they need it the most.”
House Speaker Roger Hanshaw (R, Clay) said he supports tax cuts, but not if the reduction will risk violating the terms of the state’s road bonds, which require dedicated sources of revenue. He said the state should not “do anything that jeopardizes the existing bonds.”
Governor Justice has entered the fray. He said he cannot legally suspend the tax—only the Legislature can—and he accused the Democrats of a political stunt.
“I think it is despicable that these Democrat politicians—whose mothership in Washington DC has gotten us into the mess, placing us on the brink of World War III—are now rushing to climb on the biggest soapbox they can find to flap their arms and say, ‘Look what I’m doing to help you.’”
In fairness, Senator Baldwin and his fellow West Virginia Democrats have nothing to do with Russia’s invasion of Ukraine or this country’s national energy policy. But even if you take them at their word that they just want to help their fellow West Virginians, that does not necessarily mean it is a good idea.
The conservative-leaning Tax Foundation reports that the benefits from gas tax holidays are negligible. Lower prices may entice motorist to drive more, pushing up demand which will then raise prices.
Additionally, the tax break severs the link between the cost of building and maintaining roads and those who use them. “Most state gas taxes are already set too low to fully cover state infrastructure costs but zeroing out the gas tax is a massive subsidy for drivers, shifting the cost” to other tax revenue streams.
And finally, any gas tax holiday will be temporary. That means at some point in the near term, gas prices are going to shoot back up when the tax is reimposed. Motorists will be hit with pump sticker shock all over again.
If lawmakers want to put more money in people’s pockets, they should consider permanent tax rate relief rather than temporary fixes that may or may not have the intended effect.