OAK BROOK, Ill. -- Rising gasoline prices have triggered a flurry of fuel-related legislative activity not only in Washington (see feature story in this issue of CSP Daily News), but also around the country. Here's a sampling of what's happening in some states:
California
A bill that would impose a windfall profits tax on California oil producers was approved by a state Assembly committee, said the Associated Press.
Governor Arnold Schwarzenegger, meanwhile, wrote a letter to the California [image-nocss] Energy Commission asking it to investigate the price increases. Click here for the full text of Schwarzenegger's letter.
Schwarzenegger refused to take a position on the windfall-profits tax. He said the only way to cut gas prices was to reduce consumption.
The bill (AB2442) would levy a 2% tax on oil company income of more than $10 million and use the revenue to help low- and moderate-income senior citizens pay for prescription drugs. It was approved by the Revenue and Taxation Committee by a vote of four to three.
The state Franchise Tax Board estimates that the tax would generate $120 million in the fiscal year that starts July 1 and higher amounts in subsequent years. The vote sent the bill to the Appropriations Committee, the last stop before the full Assembly.
Illinois
State treasurer and gubernatorial candidate Judy Baar Topinka (R) said Illinois should consider capping the sales tax on gasoline, reported the Chicago Sun-Times. She suggested the state suspend the tax when the price exceeds $2.50 per gallon. So if the price of gas hits $3.50 a gallon, the state would waive the sales tax on a dollar each gallon.
The state sales tax on gasoline is at least 6.25%. The state collects 5% and local governments levy 1.25% or more. Chicago drivers see about a 9% tax, the newspaper said. Topinka could not estimate how much money motorists would save or how this plan would affect the revenue collected by government.
Rebecca Rausch, a spokesperson for Gov. Rod Blagojevich, said the governor is exploring several options to deal with rising gasoline costs, but would not offer any details.
New York
AAA Hudson Valley and AAA Northway are urging New York state lawmakers to suspend the state's 4% sales gasoline sales tax in order to provide some price relief to motorists, said The Business Review of Albany. They are collecting signatures on petitions to be sent to lawmakers.
Combined state and federal taxes add 60 cents to the cost of a gallon of gasoline. The state's share is 16 to 30 cents of that amount, depending on pump price. The 4% sales tax comes on top of the state business petroleum tax and both state and federal excise taxes. Gasoline sales taxes are deposited in the state's general fund and a repeal of the sales tax would not affect the dedicated highway fund.
And in New York City, Mayor Michael Bloomberg said the city cannot afford to do anything about high gasoline prices and that Albany lawmakers have no plans to reduce taxes at the pump, according to The New York Sun.
The fact of the matter is, gasoline is going up and there's not a lot that this city or this state can do about it, the mayor said. It has to do with national and international politics and worldwide commerce and things that the governor and mayor really can't control.
The Republican-controlled state Senate has already passed a bill that would cap the amount of the gasoline that could be taxed at $2. But the Democratic-led Assembly rejected an identical measure, and it was not adopted as part of the state budget.
Gov. George Pataki said the state should be turning to fuel alternatives. A spokesperson for the governor, Peter Constantakes, said the governor would review any fiscally responsible proposals.
Minority leader James Tedisco (R) introduced an amendment earlier this month that is identical to the Senate bill. He said it would save motorists between eight and 10 cents a gallon.
The chairman of the Assembly's energy committee, Paul Tonko, said that while the Senate passed a bill to cap gasoline prices, its leaders did not fight for it in budget negotiations. Tonko said though he wouldn't rule out a cap, raising the issue now disrupts the balance between revenue and the tax cuts just agreed to in the budget. He said it was disingenuous and irresponsible. He also said there are no guarantees that motorists would see the dividends of a tax cap in their wallets.
Also, a Republican seeking Senator Hillary Clinton's seat, John Spencer, called on Clinton to push to eliminate the 18-cent federal gasoline tax.
Virginia
Virginians very likely will not see the state's gasoline tax go up, Gov. Tim Kaine (D) said, according to WTOP-TV. "I think the chances of the legislative bodies putting a gas tax in a proposal and coming and trying to get me to sign it are zero, because I don't see them compromising on it," Kaine told WTOP after his appearance on Ask the Governor on Washington Post Radio. But he said if they did reach a compromise that contained a gasoline tax, he wouldn't necessarily veto it.
Kaine's plan, intended to solve Virginia's transportation woes, relied on user fees and did not include increases in the state's gasoline tax, its sales tax, its income tax or its property tax rates, said the report.
He also said he would invoke state anti-gouging laws against gouging, reported AP. "We've got price-gouging legislation on the books in Virginia, and I'm going to not hesitate to use it, said Kaine.
He said he would use an enhanced law that takes effect July 1 that allows the governor, during a time of disaster, to impose price reductions on any supplier found to be offering goods or services at "such an unconscionable price" that it creates a panic and endangers public welfare. It allows a governor for up to 30 days to issue an emergency order without a hearing forcing a supplier to align prices with that of the local market. Notice is sent both by certified mail and personally delivered by an agent of the governor. Failure to comply would prompt the governor to turn the matter over to the state attorney general for investigation.
Kaine did not accuse any business of gouging presently. "Most of the studies I've seen suggest that the dramatic increase in gas prices are not profits to gas station operators. It's oil company profits and the gas station operators are operating on kind of tiny margins whatever the prices that they're advertising," he said.
Finally, Kaine has eased state regulations limiting the hours truckers can drive hauling gasoline tankers without rest, and he has also relaxed weight restrictions on fuel tankers.
North Carolina
A conservative political group seeking to cap North Carolina's gasoline tax will voice its concerns to state lawmakers next month, reported NBC17-TV. Conservatives United plans to rally when the General Assembly reconvenes on May 9.
North Carolina's gasoline tax of about 30 cents a gallon is the third highest in the country, the report said. It increased by almost three cents a gallon in January and could go up again in July because it is based in part on the wholesale price of gasoline.
Officials with the state Department of Transportation told the news outlet that the state's gasoline tax is so high because North Carolina has more state-maintained roads than surrounding states. The DOT opposes any gasoline tax cut, saying it would mean less money for road projects. Some lawmakers agree, saying a two-cent cut in the gasoline tax wouldn't mean much for consumers. It would save about 14 cents on every $20 in gasoline pumped.
Pennsylvania
The Pennsylvania Emergency Management Council is backing Gov. Edward G. Rendell's decision to temporarily extend the amount of time truck drivers can spend on the road while delivering gasoline.
Lt. Gov. Catherine Baker Knoll, who chairs the council, said, "This approved three-hour extension compensates for the time truckers spend waiting in line for fuel, and it ensures the supply chain will continue to move to get gasoline supplies where they are needed most."
Rendell extended work hours for commercial haulers, allowing those operating in Philadelphia, Bucks, Chester, Delaware and Montgomery counties to work 14 hours until midnight on Wednesday.
On Friday, Rendell also asked the U.S. Environmental Protection Agency (EPA) to issue a temporary waiver that would allow suppliers in the five- county Philadelphia area to sell fuel that does not meet federal Clean Air Act reformulated gasoline guidelines.
New Mexico
Gov. Bill Richardson renewed his call for the oil and gas industry to pitch in $50 million to help consumers in New Mexico currently struggling with high gasoline prices. He also asked citizens to contact the New Mexico Oil & Gas Association to urge their membersmore than 200 oil and gas companiesto help the state's families with their energy costs. He first requested $50 million in assistance from the oil and gas industry last fall during the special session of the state legislature he called to help consumers with energy price relief.
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