Last Modified: Sunday, September 25, 2016 11:19 AM
Ken Naquin, a member of Gov. John Bel Edwards’ transportation task force, said last week the doubling of Louisiana’s 20-cent gasoline tax is being considered as a way to generate funds needed to build some essential mega highway projects. Naquin is chief executive officer of Louisiana Associated General Contractors.
Doubling the gasoline tax could be one of the most difficult tasks ever attempted. The state’s current tax is 41st among the 50 states. A 40-cent-per-gallon tax would be the highest in the South and fifth highest in the nation.
Naquin said raising the tax is imperative because of the boom in industrial construction taking place in areas like Lake Charles and Baton Rouge. He is talking about the need for improved highways and bridges that are in deplorable shape.
“We can’t get goods and services in and out of our plants right now,” Naquin said.
One of those mega projects he is talking about is a new Interstate 10 bridge over the Calcasieu River at Lake Charles. It doesn’t appear to be possible without additional funding.
The five states with the highest state gasoline taxes are Pennsylvania, 51.4 cents per gallon; Washington, 49.4 cents; New York, 43.4 cents; Hawaii, 43 cents; and California, 38.6 cents. The lowest are Alaska, 12.2 cents per gallon, New Jersey, 14.5 cents, South Carolina, 16.7 cents; Oklahoma, 17 cents; and Missouri, 17.3 cents.
Perhaps the toughest argument to overcome is the potential effect a doubled gasoline tax would have on Louisiana dealers in border areas. Mississippi is at 18.8 cents per gallon, Texas at 20 cents and Arkansas at 21.8 cents.
Unfortunately, the recent historic floods and the downturn in the oil and gas industry that is affecting Lafayette and other coastal areas makes raising taxes even more difficult. Shawn Wilson, secretary of the state Department of Transportation and Development, told The Advocate those are factors that have to be considered.
“We are sensitive to the conditions of our people and the economics of a disaster,” Wilson said. “It is never good.”
The last time state gasoline taxes were raised was in 1984 when Edwin W. Edwards became governor for an unprecedented third term. Even Edwards, who seldom shied away from raising taxes, didn’t like the idea of raising gasoline taxes.
The higher tax was part of a $748 million tax package approved during a special session of the Legislature in March. Those taxes followed a $136 million personal income tax increase passed during a 1983 special session called by Dave Treen, who was governor until March 12, 1984.
Before Edwards took office, Treen asked him for help in erasing a projected budget deficit, and the former governor was more than happy to oblige. Current Senate President John Alario, R-Westwego, was a state representative in 1984, and he said opposition from lawmakers melted when Edwards showed up.
A veteran lobbyist told The Associated Press, “Treen didn’t show the leadership to get the Legislature to march to his tune. Watch ole’ Edwin. He’ll whistle them along and get what he wants.”
Edwards asked for $1 billion in new taxes when he took office and got the $748 million approved. By the time the Legislature ended its session it had passed the fourth penny of the state’s sales taxes and higher taxes on gasoline, cigarettes, liquor, corporations, sand and gravel, timber and pulpwood, hazardous waste and insurance premiums.
Even so, Edwards continued to complain about the higher gasoline tax. The tax at that time was 8 cents per gallon, and it was doubled to 16 cents. The governor said in June of 1984 he would roll back some tax increases, especially the doubling of the gasoline tax, when the state’s revenue growth would allow it.
Obviously it never happened. The gasoline tax stayed at 16 cents per gallon. And the $748 million in new taxes produced only about $560 million. People cut their spending when taxes are increased.
The revenue situation never got much better over the next four years. Roemer in 1988 inherited a $1 billion deficit from the last year of Edwards’ third term, and it took some creative financing to wipe it out.
An additional 4-cent gasoline tax was added during the Buddy Roemer administration (1988-1992) to pay for four-laning highways like U.S. 171 and U.S. 165.
Ironically, Edwards talked in 1993 about increasing the gasoline tax by 10 cents per gallon after he took office for his fourth term in 1992. He also wanted to levy a 5¼-mill statewide property tax, neither of which came to pass.
Much has changed in the Legislature since those days. Republicans call the shots now, and they don’t cave easily for anyone. Getting the current crop of lawmakers to raise the gasoline tax by any amount won’t be easy. A bill raising it by 10 cents per gallon to produce $300 million annually for 10 years never came up for a House vote in 2015 after a committee voted 7-3 to approve it.
The flip side of that coin is the realization that the state’s highways and bridges won’t get much better without additional funds because there is a nearly $13 billion construction and maintenance backlog. Naquin said while Louisiana let $550 million in infrastructure work out for bid in 2015, Texas is putting out $1 billion a month.
A higher gasoline tax is a major and logical solution to better roads and bridges that are needed to keep the industrial boom going. However, doubling it appears to be out of the question.