NY Senate votes to eliminate state gas tax for summer

By VALERIE BAUMAN | Associated Press Writer

May 7, 2008

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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 Gov. David Paterson.

The Republican-sponsored bill would eliminate the gas tax between Memorial Day weekend and Labor Day.

The proposal comes at the same time the federal government and presidential candidates are debating a federal "holiday" from gas taxes.

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 46-15.

"Look at New Jersey, where you'll find a lower tax for gasoline, and you know what you'll find? A lower price for gasoline," said Sen. Andrew Lanza of Staten Island. "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 don't 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 can't 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 has opposed 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 gas holiday, but it's 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 Tennesee have statutes that would increase their taxes to offset any federal gas holiday. Indiana and Illinois cut their gas 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 percent tax cut resulted in just a 3 percent reduction in prices.

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On the Net: http://assembly.state.ny.us/leg/?bnP>S07594