It’s a simple concept: Buy local, help local government entities.

But many people may not realize that proceeds from the county’s gasoline sales and auto registrations are the main sources of revenue for Ironton’s street department and the county engineer’s office.

“Because we live so close in proximity to West Virginia and Kentucky, it’s easy to just stop and get gas over there, but when our roads aren’t clear or when we don’t have salt or we can’t clear our highways, it’s because the money has been distributed somewhere else,” Ironton Finance Director Kristen Martin said.

By the numbers

The State of Ohio charges a fuel tax of 28 cents per gallon. To compare, Kentucky charges a 24.7-cent gas tax. In West Virginia, gasoline has a 32.2-cent tax.

In 2010, the Ohio gas tax brought in approximately $1.8 billion statewide. In 2009, it brought in approximately $1.7 billion.

Of that revenue, $100,000 is allocated to the state’s Grade Crossing Fund each month, two percent goes to the State Highway Safety Fund and a monthly distribution equal to five cents on each gallon of fuel sold at stations operated by the Ohio Turnpike Commission goes to the commission.

After those distributions are made, .875 percent of the tax is allocated to the Waterways Safety Fund, .125 percent goes to the Wildlife Boat-Angler Fund, and .275 percent goes to the Motor Fuel Tax Administrative Fund.

After that, one cent is allocated to the Local Transportation Improvement Program Fund. The remaining balance of the tax is distributed to the state, cities, counties and townships.

Cities receive 12.7 percent of what’s left, while 70.2 goes to the state, 11.1 percent goes to counties and 6 percent goes to townships.

The amount of money each city receives is dependent on the number of cars registered in that city. Each of Ohio’s 88 counties receives an equal share of the 11.1 that’s designated to the counties.

“We have to support the individuals which are responsible to take care of the streets and the street department,” Martin said. “When you don’t get enough money in to take care of them, there’s nothing else you can do. We can’t charge (residents) any bills and we don’t have a rate or anything like that. We just literally survive off the gas tax and auto registration.”

Last year the city street department received $377,121 from the gas tax. The county engineer received approximately $2.36 million.

‘An unknown fact’

A discussion at a recent meeting of the Ironton City Council finance committee revealed that some of the council members were unaware that the gas tax helps fund the street department. Mayor Rich Blankenship said it’s a common occurrence.

“I think it’s an unknown fact to the general public that if you buy gasoline outside Lawrence County and Ironton that that money goes wherever you buy it,” Blankenship said. “So we are encouraging people to buy their fuel here.

“We use the money to fix the roads, so when they go across the bridge to save a dime, they’re not just saving the dime, they’re taking away from potential paving potholes and repairs and general repairs to the streets.”

Lawrence County Engineer David Lynd said his department relies on the gas tax for over half of its paving expenses. It pays for the department’s 34 employees as well as materials for road repair and maintenance.

“Nobody wants to see more tax but if you can see where your money is going it helps,” Lynd said. “It pays for salt and asphalt to pave and all of the things you need.”

Ironton’s street department woes

Facing low funds during the last quarter of 2010, Ironton street department workers were voluntarily transferred to other city departments so the city would not have to make layoffs, the mayor said. According to the AFSCME union contract, workers can be transferred to other departments for up to 29 days before they have to be re-employed in their original department. After they are returned, the city can transfer them again.

For the winter months, all five of the employees are back in the street department.

Blankenship said the department’s financial problems are threefold: Workers compensation claims, fewer gas sales in the county and fewer auto registrations.

The city had been making each of its departments pay workers’ compensation equally. The street department did not have as many claims, but still had to pay an equal share. Now the workers’ compensation claims are distributed according to what department they came from, he said.

“If we have trouble supporting (the department) last year, then we definitely will have to make some adjustments in the line items,” Martin said. “Hopefully we don’t have to affect the employees but we definitely have to make some changes so that the revenue supports the expenses.”

If layoffs are necessary, the city would lay off the union workers with the least seniority first, no matter what department they work in. That excludes police and fire department departments.

Rising costs

Besides employee salaries and road repair, the gas tax also pays for salt.

“Salt prices keep going up,” Blankenship said. “Everything has increased over the years and we have to be very cautious in using that salt. Of course, we can’t predict the weather and we’ve had a bad December and a start to January.”

The state gas tax last increased in 2005, when it was raised from 26 to 28 percent. But rising costs of asphalt and other materials meant that whatever surplus the county saw from the increase was quickly diminished, Lynd said.

Though gas prices increase, because the tax is based on cents-per-gallon and not a percentage of the cost, the state does not see any increase in revenue when the prices rise.

“There’s a gas hike so that doesn’t help,” Martin said. “People buy less gas and they’re traveling less because it’s more expensive. It’s still not an ideal situation and we want to keep them going as long as we can. We want to get the word out there about how we can increase the revenue and increase their service to the city.”