By James Pilcher
The Cincinnati Enquirer

The last time gasoline prices were this high, two Midwest governors gave drivers a break by suspending their state's gasoline excise taxes. But with prices at the pump threatening to set records, don't expect a similar break this time.

In fact, higher gas prices will probably trigger at least a temporary gas tax increase this summer in Kentucky, while a 2-cent per gallon increase is certain on July 1 in Ohio.

"The gas tax is a user tax that funds our infrastructure improvements such as roads and bridges," said Orest Holubec, spokesman for Ohio Gov. Bob Taft. "It also funds the governor's jobs progress plan, a 10-year plan that mean jobs for Ohioans. It would be short-sighted to repeal or suspend the tax, even for a short time."

In the summer of 2000, when retail prices hit $2 a gallon around the Midwest, the governors of Indiana and Illinois put their states' gas taxes on short-term hold to give drivers a break.

Nowadays, many state budgets are in crisis - Kentucky still doesn't even have one and faces a massive deficit. So state governments in this region and across the country are saying that they can't afford such a gesture this time around.

Kentucky Gov. Ernie Fletcher said as much directly during a recent editorial board meeting at the Enquirer, calling such a tax holiday unlikely because of the state's budget crisis.

Ohio drivers now pay 24 cents a gallon in state excise taxes, on top of the 18.4 cents in federal tax collected on every gallon. Kentucky's tax rate is 16.4 cents a gallon, while Indiana's rate is 18 cents a gallon.

Kentucky's tax could rise this month because of a clause in the 1980 law that created it. The clause allows the tax to be raised if the average wholesale statewide price for a gallon of regular unleaded exceeds $1.11 for the first month of any quarter. That increase can be up to 10 percent, based on the percentage by which the wholesale price exceeds the preset index. Such an increase would apply only to the 15-cent per gallon excise tax, and not the 1.4-cent per gallon tax to help pay for underground gas storage tank replacement.

Such an increase has been triggered only once - during the 1981 oil crisis.

Officials with the Kentucky Department of Revenue said the statewide average for April, a specified survey month, has not yet been calculated since the month has not ended. But January's statewide average came close to the threshold at nearly $1.06. If the wholesale price - or what distributors pay for it before sending the gas onto retail stations - exceeds $1.11 for April, the tax increase would go into effect July 1.

Tuesday's current wholesale price in Northern Kentucky stood at $1.36 a gallon, and several area gas industry officials said they expect the monthly statewide price to exceed the index level.

If the wholesale price goes back down below $1.11 in July, the tax would go back to normal in October.

It's guaranteed that Ohio drivers will be paying a higher tax this summer. That state is in the midst of a six-cent, three-year gas tax increase approved last year that could make Ohio's gas tax 28 cents a gallon, one of the highest in the nation when the increases are finished next summer.

Holubec also said that Ohio's financial situation would be another hurdle to any tax relief.

"We just passed one of the tightest budgets that the state has seen in a long time," Holubec said. "We cut $100 million out this year and it's down $150 million next year. So that would definitely play into any decision."

Four years ago, Indiana Gov. Frank O'Bannon suspended that state's 5 percent gas sales tax for 60 days but left the 15-cent per gallon excise tax in place. A spokesman for the late O'Bannon's successor, Joseph E. Kernan, said that one difference is that the Midwest was hit especially hard in the summer of 2000.

"Now, we're seeing prices rising on a fairly level basis across the country," spokesman Jonathan Swain said. "And in 2000, we were facing a budget surplus. Now, we are seeing about $1 billion in a structural deficit, which makes such a move much more unlikely, although we're going to look at any other alternatives to help out Hoosier drivers."

E-mail jpilcher@enquirer.com