About 30 days before Republicans suffered their biggest midterm election in decades this week, party leaders in the Statehouse made a big promise to drivers to temporarily cut Ohio’s gas tax, starting just as early voting began.
As planned, gas prices listed on retailers’ signs would fall the whole 38.5 cents per gallon (47 cents per gallon of diesel) for the 90-day “gas tax holiday.”
But the savings haven’t made it to customers, at least according to about 200 Ohioans who filed complaints with the Ohio Attorney General’s Office.
Some said that despite the promises from politicians, gas retailers – not the ordinary people on their way to work – are pocketing the $725 million that state lawmakers set aside to pay for the price relief.
“I would like to see the gas prices reflect the governor’s promise of relief at the pump,” wrote Frank Conley, of Portsmouth, to the attorney general. “We saw a 10 cent drop in prices for most gas stations, not the nearly 40 cents promised. Is the Governor a liar or are these businesses crooks? Please do something about one or the other!”
The complaints are allegations, not necessarily fact. But they highlight in the words of Ohioans the ongoing frustration about rising costs and the mistrust of business and government felt around the state.
Ohio says a gas complaint by itself isn’t proof of abuse
Records show that the attorney general’s office logged Conley’s complaint but didn’t take further action. It’s a similar story for others logging concerns. Some received “guidance via livechat.” Others were referred to Ohio’s tax department or their local state lawmaker or county auditor.
“Unfortunately, there is no one price to be expected,” one staff member of the office wrote to a complainant. “For more information and further assistance, I suggest reaching out to the Ohio Department of Taxation as they are the ones handling the tax holiday.”
The legislation lawmakers passed prohibits gas sellers from selling gasoline without passing the full savings on to customers. And it directs the Ohio Tax Commissioner to refer any violations to the attorney general.
The legislation, which expires in January, offers no guidance on how to unspool the price of gas in Ohio from refinery costs, crude oil prices (which are impacted by the war in Iran) and other macroeconomic factors that shape the final price tag.
Dominic Binkley, a spokesman for Ohio Attorney General Andy Wilson, said they have not received any violation referrals from the tax commissioner. Binkley provided the 200 complaints in response to a records request.
Wilson declined an interview. But in a statement, he said a complaint by itself that the price of gas is too high doesn’t meet the burden of proof connecting the price to a failure to pass along the tax perk.
“We have requested information from the gas stations named in complaints, as well as any parent companies we’ve been able to identify,” he said. “We are reviewing the information as it comes in for evidence of conduct that may violate the law.”
Wilson’s successor, Attorney General-elect John Kulewicz, the first Democrat to win the office since 2008, said during the campaign he would go after any gas retailer who tries to “rob” Ohioans.
“The next attorney general will be responsible for pursuing those actions, and I intend to vigorously pursue legal action against any effort that siphons these savings from Ohio consumers,” he said.
A spokeswoman for the Ohio Department of Taxation didn’t respond to inquiries.
Signal Statewide sent the customer complaints to Speedway, Marathon and Kroger, the three most commonly alleged violators in the customer complaints. None responded to inquiries.
Lawmakers show signs of regret about gas-tax holiday
Both then-Republican gubernatorial candidate Vivek Ramaswamy and Gov.-elect Amy Acton proposed a gas tax holiday on Sept. 21. Acton’s proposal came first by a matter of hours, but Ramaswamy’s came with political backing from Senate President Rob McColley (also his running mate on the ticket) and House Speaker Matt Huffman, who have the power to convene legislative sessions and set the agenda.
Ramaswamy joined Republican Statehouse leaders at press conferences both before and after the legislation passed, intertwining his political ambitions and the gas tax holiday itself.
Democratic lawmakers, some of whom expressed concern that the legislation was a play to voters, had no real power to stop it. So, they voted yes, fearing their opposition would be used in ads against them.
While the gas tax usually funds state road construction, lawmakers are backfilling the money with $725 million in tax revenue that has come in beyond what the state expected. State budget officials have attributed this surplus to a data skew in the forecasts coming from last year’s expanded sales tax holiday, rather than a sign of an economic boom.
Cleveland Democrat Bride Rose Sweeney was one of the 16 House lawmakers who voted against the bill, calling it a ham-handed use of one-time funding for political gain.
At a panel event Tuesday, Sweeney said the bill was “rushed” given it passed the week after it was introduced. She went further in an interview, calling the $725 million in taxpayer dollars wasted. She said the bill prohibits customers from suing gas stations for alleged violations, meaning only the attorney general can enforce the law against any deceptive behavior.
And lawmakers, she noted, amended the bill to remove a requirement that retailers print receipts that demonstrate the reduction to customers, which could have offered more transparency in investigating allegations of abuse.
“I think the point is that nobody can know,” she said. “I believe it is clear the money is not being fully passed down.”
With the election behind them, some Republicans have been candid on the subject.
It was the right idea, said Senate Energy Chairman Brian Chavez, who voted for the tax holiday, but perhaps too hard to properly police.
“I feel like it may not have been as successful as we wanted,” he said. “I don’t have confidence that the gas stations honored the tax relief.”
State Rep. Justin Pizzulli on social media called on the attorney general to investigate what he called “fishy” pricing practices.
“Gas prices dropped temporarily, but now they’re climbing back up where they were,” he said. “So where are those savings going?”
And House Finance Chairman Brian Stewart, in an interview earlier this week, made similar remarks.
“I think a lot of folks are looking and frustrated by the degree to which all of those gas tax suspension savings have been passed on or not,” he said. “It’s something we’re going to take a look at.”
Economists warned gas-tax breaks don’t always trickle down
Some economists who have studied the question of who benefits from a gas-tax holiday have found customers get most, but far from all the money.
Researchers at the University of Pennsylvania’s Wharton School of Business looked at where the money went when three states – Maryland, Georgia and Connecticut – all tried a gas tax suspension.
They compared the three states with others nearby, making different assumptions and adjustments for comparing between different places.
In Maryland, customers recouped about 72% of the cost. In Georgia, that was between 58% and 65% and in Connecticut between 71% and 87%.
What Ohio drivers wrote about the gas-tax holiday
The complaints from Ohio customers underscore just how hard it is to say what the cost of gas should be. The price cut came amid a torrent of price hikes that mask the effect of any cut.
Keith James, of Hocking County, said gas prices fell right when the suspension kicked in, but the savings disappeared when people’s attention shifted.
“Today, just a few weeks later, the price of gas is higher than before the tax was removed,” he said. “This is just simply greed on the part of these gas suppliers and has ruined the whole purpose of the tax relief effort.”
A Massillon man who didn’t give his name said he saw gas prices shoot up days after the holiday started.
“Where is the money going???? How are the prices right back where they were? It definitely has nothing to do with Iran or supplies.”
Pamela Herrera, of Toledo, watched as gas prices jumped from $3.33 per gallon to $4.19.
“There is no reason for this whatsoever and no one cares to do anything about it,” she said. “I’m on a fixed income I can’t afford this especially when they are lining their pockets.”