Ohio Gov. Mike DeWine signed into law the two-year Transportation Budget on April 3, 2019, without any line item vetoes. The signing resolves contentious negotiations between the governor and the General Assembly over infrastructure spending and funding alternatives.
The Transportation Budget adopts 10.5 cents per gallon increase to the Ohio motor fuel tax rate (gas tax) and 19 cents per gallon increase for tax on diesel fuel. This increase, the first since 2003, means that the Ohio gas tax rate will be 38.5 cents per gallon for gasoline and 47 cents per gallon for diesel fuel beginning July 1, 2019.
Other notable measures in the Transportation Budget include the following:
- repealing the front license plate requirement effective July 1, 2020.
- annual fees on alternative fuel vehicles, including $200 on electric vehicles and $100 on plug-in hybrid vehicles.
- increasing the Earned Income Tax Credit for Ohio income tax purposes.
- taxing compressed natural gas at the diesel fuel rate through a five year phase-in period.
The Ohio Transportation Budget comes as Congress and states across the nation mull ways to fund infrastructure spending. In recent weeks and months, Congress has considered increases to the federal motor fuel tax and public works bonds and loans. President Donald Trump called for infrastructure legislation during his State of the Union speech in February, but did not offer details. Meanwhile, Ohio is not alone with respect to gas tax increases, as Bloomberg Tax reports there are proposals in 22 states to increase different types of motor fuel taxes. We can expect further developments as Congress and the states address America’s infrastructure.