NM fuel tax increase could ease fiscal pain

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By The Staff

For many years New Mexico citizens have seen gasoline prices bounce up or down by 5, 10 or more cents per gallon.  

Sometimes there were several price changes each week.  

Service station operators, fuel distributers and the general public easily handled the constant price changes.  

Nor have we seen any major negative economic impact or complaints from the general public concerning these constant price bounces.

 The April 2010 AARP Bulletin listed the gasoline tax per gallon for each of the states. The average for all the states was 26 cents per gallon for gasoline. Forty-three states had higher rates than New Mexico’s 18.8 cents per gallon.  The NM Legislative Finance Committee’s fuel tax specialist told me each one-cent increase in NM Fuel Tax provides an additional $12.7 million in revenue ($8.4 million from gasoline and $4.3 million from diesel fuel). If NM increased our fuel tax by 7.2 cents per gallon to the national average of 26 cents per gallon, it could generate an additional $91.44 million dollars in revenue.

Of course, the price increase will cause some drivers to better plan trips and a slight reduction in driving could be expected. Less driving is good, less pollution, less road damage, more use of public transportation and less imported oil, so maybe only $80 million-$85 million of new revenue might be generated.

Last week, I traveled through Colorado, Idaho and Utah.  Their highways and tourist communities were filled with out-of-state tourists enjoying their summer vacations. I spoke to hotel operators and plenty of other business owners who were pleased with their tourist sales. Yet our neighboring state’s gas prices ranged from $2.86 to $2.99 per gallon, at the same time my local station charged $2.61 per gallon.  Obviously there is ample price spread for a 7.2 cents NM Fuel Tax increase, which would bring our cost to $2.69 per gallon, 17 cents per gallon below our lowest neighboring state.  

Newspapers reported NM could see an $80 million-budget gap this fiscal year that began July 1.  Our scared incumbent legislators are busy searching for more spending cuts.

Budget balancing options include more school closings and teacher layoffs; reduced funding for universities, senior and veteran programs, road funds and laying-off more state workers. These are all short- and long-term negatives and limit our economic recovery and future growth.  

I am all for cutting wasteful fat in state spending, but $80 million on top of last year’s cuts will cut a lot of muscle in schools and other essential programs.

The powerful tourism and energy lobbyists will scream and spend lots of money to defeat any NM fuel tax increase.  

Yet the truth is an increase will have a very limited impact on the NM citizens and our economy.  

But that is not what you will hear in the media and lobbyist ads.  Lobbyists will say this tax will cause massive job loss and inflation.  

But think! Remember the 5-, 10-, 15-cent bounces in gas price cause little impact or citizen concern.  Also note that out-of-state tourist and truckers, not NM citizens, will pay much of the increase.  

Don’t expect any support for this increase from our candidates for governor or local legislators.  

A check of their political contributions will likely reveal plenty of dollars from the energy industry.  

Only voters can force this change.  Demand a fuel tax increase.  It is the best option!

Donald Morris

Los Alamos