WASHINGTON – Local governments should raise gas taxes and educate energy consumers to help cushion the effect of rising fuel costs, experts told regional government leaders Friday.
The Metropolitan Washington Council of Governments planned the forum — before Hurricane Katrina sent fuel prices soaring — as a way to help governments in Maryland, Virginia and the District of Columbia to deal with rising gas costs, said Judith Davis, council chairwoman and mayor of Greenbelt.
Maryland, Virginia and Washington, D.C., should act independently, but in coordination, to increase gas taxes by 15 cents per gallon in 2006 and 2 cents per gallon each year from 2007 through 2011 with smaller regular increases beginning in 2012, said Charles Olson, a University of Maryland business professor.
This plan would certainly be controversial, Olson said, but it would encourage people to cut gas use while providing income that could be used to improve a variety of transportation resources. Maryland’s transportation secretary predicted Friday that the state’s Transportation Trust Fund, which pays for road projects, could face a shortfall of $120 million over the next six years because citizens are driving smaller cars and lesser distances to conserve costly fuel, causing gas tax revenue to dwindle.
Since 2003, the price of gas in Maryland has been consistent with the national average for the past several years, according to statistics presented by Doug MacIntire of the federal Energy Information Administration.
That national average has been rising and causing stress for the majority of Americans who rely on their cars for transportation.
The reason for the price increase is simple, MacIntire said, “Demand is growing faster than supply can keep up.” Not only the United States, but other large countries like China and India continue to have higher demand for gas, he said.
While the Energy Information Administration has been forecasting that prices will eventually go down, a new set of predictions due to come out soon will say that prices will likely remain at high levels, MacIntire said.
While a lot of news has focused on individuals having to reduce other spending to afford higher gas prices, state and local governments may also have to cut back because of increasing costs. These cutbacks would impact the services that these governments usually provide, said forum participants.
Gasoline is not the only fuel that is costing more. Prices for natural gas are also increasing, said Stephen Fuller director of the Center for Regional Analysis at George Mason University’s School of Public Policy.
This winter, home heating bills are going to hurt people and they will have to make tradeoffs, Fuller said, low-income families may have to ask, “‘Should we heat our home or should we eat?'”
“A lot of energy consumption can be reduced if people just pay attention to how they use their energy,” said economist Jerome Paige.
He suggested that educating people about simple ways to use less energy could help the problem and cited a study done by the D.C. Energy Office in 2003 as evidence.
That study taught children about energy efficiency, including using caulk and low-energy light bulbs, then analyzed their family’s energy bills, he said.
After the children learned how to save energy, their families saw dramatic decreases in their use and costs.
COG plans to take suggestions from the forum and work to develop solutions.
The world is different and I think it’s going to stay different, Olson said. “The region has to do what it can do to adapt to this.” -30- CNS-9