Proposed gas tax hike would also alter DOTD spending, operations

Source: Stephanie Riegel | BR Business Report

A Baton Rouge-based coalition determined to invest in the state’s crumbling roads and bridges will once again push for a gasoline tax when the Legislature convenes in April.

Unlike the unsuccessful efforts of recent years, however, the bill—which is being dubbed the Government Reform in Transportation, or GRIT, Act—includes sweeping reforms of spending and operations at the Louisiana Department of Transportation and Development.  

Also unlike past attempts, the bill will be sponsored by a conservative Republican businessman from north Louisiana, Rep. Jack McFarland, who says despite his general opposition to new taxes, the state has to invest in its transportation infrastructure if it wants to to compete.

“I didn’t support the gas tax last time because it had no reforms in it,” says MacFarland, a logger from Winnfield. “But we’re just at a point in Louisiana where we have to make up our minds if we’re going to make an investment in our future.”

The bill, which would require a two-thirds vote of the Legislature for passage, would raise the state’s gasoline tax by 10 cents in the first year and by an additional two cents every other year until 2033, when it would be a total of 22 cents higher than its current 20 cents.

Each one-cent increase would raise an estimated $30 million, which, by 2033, would total some $660 million a year in new revenue.

As currently envisioned in McFarland’s bill, 60% of those new revenues would go to maintenance of existing roads and bridges, which have nearly $15 billion in deferred maintenance needs.

The other 40% would be dedicated to helping fund new “capacity” projects, including a new Mississippi River bridge in Baton Rouge, that would be specifically identified in the legislation.

An equally important part of the package, however, is an overhaul of the way DOTD operates and spends its money, which comes almost exclusively from the state’s Transportation Trust Fund. The bill would cap agency overhead spending from the TTF—which currently grows at 4% annually—at roughly its current level. But it would encourage innovative operations and incentivize performance-based budgeting as a way to help save money.  

The bill also would require an initial DOTD forensic audit and annual oversight of how the department spends its existing funds to ensure compliance with state laws and constitutional restrictions.

McFarland says he became interested in sponsoring the legislation because even though he spends as much as $30,000 a month on gasoline for his timber business, the crumbling roads and bridges in his district are a greater liability long term.

“I recently bid on a tract of timber that was roughly 30 miles from the mill, so that was the cost I based my bid on,” he says. “Two weeks later, the state closed two bridges. Now, I have to drive 60 miles to get to the mill and I had to put four trucks on the job instead of two.”

In recent weeks, McFarland has been talking up the legislation in meetings around the state with stakeholders and business groups, the latter of which, he says, have warmed to the proposal once they learn more about the reform measures and the fact that the tax increase would phase in gradually over 10 years.

“Right now, we have the seventh-lowest gas tax in the country,” he says. “If this goes into effect, even by 2033 we will still be only around 30th in the country so we’ll still only be middle of the road and you know those other states will increase their tax before we do. We have to do this to compete with them.” 

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