Ohio Gas Tax Shortchanges Metropolitan Areas Says Brookings; Heavy Bias Toward Rural Areas Exacerbates Transportation Funding Problems

3/5/2003

From: Steve Bowers of the Brookings Institution Center on Urban and Metropolitan Policy, 202-797-6414 or sbowers@brookings.edu Colin Johnson of the Brookings Institution, 202-797-6310 or cjohnson@brookings.edu

WASHINGTON, March 5 -- The Ohio gas tax generates approximately $1.4 billion a year statewide for new roads, repair for aging infrastructure, and congestion relief, yet the state distribution formula diverts most funds away from areas with the greatest needs and the highest contribution of gas tax revenue.

A new study released today by the Brookings Institution Center on Urban and Metropolitan Policy examines the geographic pattern of transportation spending in Ohio between 1980 and 1998. It concludes that the state formula creates a fiscal burden on Ohio's cities and suburbs. Over the 18-year period, rural counties received disproportionate funding for maintenance, new construction and rehabilitation than their metropolitan counterparts, reflecting a distribution system that fails to reflect local population density, miles traveled or other indicators of need.

The study also cites the restriction of gas tax revenues to highway purposes only, which significantly limits the ability of Ohio's growing metropolitan areas to create transit alternatives. At the same time, the ability of metropolitan areas to repair and maintain existing roads is in jeopardy, forcing cities and suburbs to consider alternative tax increases and stalling efforts to plan and manage population growth-and grow their metropolitan economies-in the decades to come.

"The rural-focused distribution structure for Ohio gas tax revenues helped create a strong highway system that reaches every corner of the state, but the time has come for leaders to reassess today's transportation challenges," said Robert Puentes, senior research manager for the Brookings Institution Center on Urban and Metropolitan Policy. "Urban counties consistently contribute more gas tax revenues to the state then they receive in return relative to their amount of vehicle traffic, vehicle ownership and demand for driving. The transportation networks of Ohio's seven major metropolitan areas are critical to the social and economic health of the state, and should be supported by a balanced system designed to keep Ohio cities and businesses competitive for the future."

The 47-page report, "Slanted Pavement: How Ohio's Highway Spending Shortchanges Cities and Suburbs," can be downloaded at http://www.brookings.edu/urban. In addition to detailed analysis of state highway spending, the report also describes the intricate system of fiscal responsibility for Ohio's transportation network, outlining three key areas of bias favoring rural areas: counties receive equal shares of some revenues without regard to local population density, numbers of vehicle registrations, or gasoline sales; highway funds are generally spent on state roads only, leaving counties, municipalities, and townships responsible for maintaining a large percentage of the state's roads and bridges; and Ohio restricts the use of gas tax revenues to highways only to the detriment of developing transit alternatives.

The Brookings Institution Center on Urban and Metropolitan Policy is committed to shaping a new generation of policies that will help build strong neighborhoods, cities, and metropolitan regions. Learn more at http://www.brookings.edu/urban.