ALBANY, N.Y. -- The New York Senate has passed legislation to suspend state gasoline taxes for the summer, but the initiative has little traction because of opposition from the Assembly and Governor David Paterson, said the Associated Press. The Republican-sponsored bill would eliminate the gasoline tax between Memorial Day weekend and Labor Day.
Senate Republicans claim the bill would save New Yorkers about 32 cents per gallon in state petroleum business, sales and motor fuel excise taxes. The measure passed the Senate 46 to 15.
"Look at New Jersey, where you'll find a lower tax [image-nocss] for gasoline, and you know what you'll find? A lower price for gasoline," said State Senator Andrew Lanza (R). "Gas costs more here, because we impose a higher tax here. If we impose a lower tax here gas will cost less here. What is so hard about that to understand?"
Opponents to the New York measure—which comes in an election year when the cost of gas is a top complaint for voters—say they do not trust the oil industry not to jack up prices to eliminate any consumer savings.
The bill would also authorize anti-price gouging penalties for gas station owners and gasoline distributors who don't pass the savings on to consumers, Republicans said.
Paterson has said New York cannot afford to lose the hundreds of millions of dollars in revenue in the face of more than $20 billion of projected deficits over the next three years.
Republicans claim that if federal, state and local governments all temporarily suspended their taxes for the summer, New Yorkers would save 65 cents per gallon at the pump. Presidential candidates Sens. John McCain and Hillary Clinton have already called for a suspension of the 18.4-cents-per-gallon federal gasoline tax over the summer. Sen. Barack Obama opposes the suspension.
Silver said the Senate's measure would result in a $500 million shortfall in revenues, undercutting funds dedicated to state to road and bridge construction.
Legislators in Missouri have also proposed a gasoline tax holiday, but it is currently a one-house bill stalled in the fiscal committee, according to the National Conference of State Legislatures. Florida Gov. Charlie Crist has proposed a two-week tax break on fuel prices, but the measure is stuck in the legislature.
Kate Marks, the NCSL energy program director, said the suspension of excise taxes could eat away at highway funds, and a sales tax suspension could affect overall state budgets and available funds.
California, Oklahoma, Nevada and Tennessee have statutes that would increase their taxes to offset any federal gasoline tax holiday. Indiana and Illinois cut their gasoline taxes temporarily in 2000 with the expectation it could save taxpayers money, but a report from the National Bureau of Economic Research found the 5% tax cut resulted in just a 3% reduction in prices.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.