COLUMBIA, S.C. -- With a gallon of gasoline breaking $3 and voters unhappy, state leaders across the country are taking a sudden, sharp dislike to gasoline taxes, proposing to eliminate the levies that are a mainstay for road programsor at least suspend them for the summer, reported the Associated Press.
Governors have floated ideas to trim or suspend state gasoline taxes in Maryland, South Carolina and Connecticut. State legislators are pushing similar measures in Georgia, New York and Nevada. The proposals are winning vocal support from Republicans [image-nocss] and Democrats alike, though none have yet become law.
South Carolina Gov. Mark Sanford called on the state House and Senate to provide immediate tax relief to South Carolinians in the form of suspending the state's 16.75-cent-per-gallon gasoline tax from Memorial Day through Labor Day. In order to provide this important tax relief to South Carolina families, the Governor has asked the S.C. House of Representatives to amend their budget before sending it back to the Senate to include $134 million to cover the cost of the gasoline tax suspension, and for both the Senate and House to adopt the recommendation when the state budget goes to conference committee later this month.
The savings would translate into roughly $63 dollars per family from Memorial Day to Labor Day, he said.
Critics say the proposal is a mistake, questioning whether drivers would actually see the tax cut, the potential to undermine necessary road and transportation programs and the larger environmental impact.
Still, with elections later this year, the popularity of the idea was made clear in South Carolina when the Republican governorwho has been unable to win support for a number of other proposed tax cutsquickly won bipartisan support for his proposal.
I feel like I'm the evangelist who's been singing at the country tent. Welcome to the tent, Sanford said after a news conference that grew so jammed it had to be moved from his office into the statehouse lobby outside. There's a lot of energy around this issue.
In other states:
New York lawmakers agreed Wednesday to cap the sales tax at 8 cents per gallon, freezing the tax at the rate paid when gas costs $2 a gallon. Lawmakers said that would save consumers $450 million a year. North Carolina Gov. Mike Easley (D) wants to cap the gasoline tax and said he'll include a proposal in his budget proposal this week. Connecticut Gov. Jodi Rell (R) threatened to call a special session on energy issues and said she is open to a legislative proposal to suspend the state's 25-cent-per-gallon tax for the summer. Georgia Democrats are demanding Gov. Sonny Perdue (R) suspend the gasoline tax, as he did after the spike in prices that followed Hurricane Katrina.Other states where the idea has been raised include Texas, Minnesota, Delaware and Idaho.
The gasoline tax is the most widespread target as constituent anger grows over prices, but it is not the only measure being considered. California zeroed in on oil companies when a key legislative committee approved a windfall profits tax aimed at oil producers. And as reported in CSP Daily News on a frequent basis, state attorneys general are investigating and sometimes suing gasoline retailers for alleged price gouging.
States are looking hard at the one part of the cost of gasoline that they can controlthe state tax. On average, states add 28.1 cents to each gallon of gasoline from a combination of excise taxes, business taxes and state and local sales taxes. It varies from a low of 8 cents in Alaska to a high of 49.5 cents in New York, according to the American Petroleum Institute (API). The federal government adds 18.4 cents to each gallon.
It's very easy to point the finger of blame at the oil companies, said Pete Sepp at the National Taxpayers Union, which supports the cuts. But government is making a killing on these high prices, too.
In South Carolina, Sanford estimates a three-month tax suspension would save a family $63. It would cost the state $134 million.
But consumers might have a hard time noticing any savings at the pump, especially if prices keep rising, experts told the Associated Press. That is because retailers pay the tax when they buy gasoline from their distributor, and prices change quickly, said Rayola Dougher, manager of energy market issues for API. So a spike in oil prices could easily swallow up a break from the state.
A small tax cut like the one being considered in New York, which would be at least 4 cents, would be hard to see in day-to-day price shifts. A bigger cut like South Carolina's 16.8 cents would be easier to notice, depending on the price of crude, said Dougher. The prices have been changing a lot harder and faster than 4 cents these days, Dougher said. If you get up to 15, 20, 30 cents, sure, you're going to see it. But it's going to be hard to see four for all the noise.
Others argue it is not enough in the face of the nation's dependency on oil or the impact of fossil fuels on the environment. Cutting the gas tax is a false solution. I don't think the public is fooled, said Rob Sargent, energy analyst with the environmental coalition called the State PIRGs. It just delays the inevitabledealing with the bigger problemand that is our overreliance on oil.
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