On Wednesday, the Ohio House of Representatives and the Ohio Senate approved a 90-day suspension of the state’s gas tax, planning to backfill it with funds from the state’s General Revenue fund. With a two-thirds majority in favor of the bill in each chamber, the bill will take effect immediately. The governor signed the measure into law Thursday.

The bill will cost the state an estimated $700 million according to the Legislative Service Commission. The bill itself sets aside $725 million in general revenue funds to cover these lost expenses.

While a majority of Ohio economists polled do not think a gas tax suspension will provide meaningful relief to Ohio households, this decision does reveal something: Ohio legislators are willing to pay $725 million to support households. What other ways could they do it?

Household rebate

One weakness of the current strategy is that a gas tax suspension only supports drivers. It is a mistake to say that the fuel price hike we have seen this year due to the War in Iran only impacts drivers. Fuel costs have driven up prices across the board and even households without cars are paying the price.

The current gas tax suspension disproportionately benefits two-car households and leaves Ohio’s 370,000 no-car households out, even as they face higher prices themselves. A change to a flat household rebate would mean each household would get about $150, with no-car households benefiting the same as 3+ car households.

Targeted rebate

This last point raises an important consideration: price increases are felt differently throughout the population. Low-income households are likely to feel the sting of higher prices harder than upper-income households. Targeting the rebate to the bottom quintile of households heaviest hit by increases would increase the per-household impact to $760.

Another option would be to target low-income households with children, the types of households that are likely to have the longest-lasting pain from economic shocks. Last year’s $450 million child tax credit proposal would provide up to $1,000 per household, providing more meaningful relief to more at-risk households at a much lower price than the gas tax proposal.

Targeted transportation relief

If lawmakers are particularly tied to transportation relief, there are ways to do that, too. County Job and Family Service offices already provide gas cards and bus passes to residents in need. Transit agencies like COTA have longstanding programs providing discounted transportation fares to people in need. Providing funds for county Job and Family Service offices and local transit agencies to temporarily expand transit options for low-income workers could concentrate relief in households most affected by rising transportation costs.

This time around, lawmakers opted for a simple, popular solution: temporarily suspend a gas tax to lead to a 90-day decrease in gas prices for every commuter, trucker, or nearby resident who fills up on gas in the state. Lawmakers showed they are willing to open their wallets in a moment like this. Next time Ohio residents experience a large, unexpected price shock they have the chance to be a little more creative and help people more at a lower price.

This story is republished from the Ohio Capital Journal under a Creative Commons license. View the original article.