Proposed fuel tax holidays a no-go in Louisiana

| 7/3/2008

Multiple efforts in the Louisiana House that have died sought to appease constituents who are feeling pain in their pocketbooks at each fill-up.

One resolution sought to offer people fueling with gas or diesel a four-month break on fuel taxes while another effort called for a respite during the Fourth of July holiday weekend.

Rep. Ricky Templet, R-Gretna, told the House Ways and Means Committee his resolution – HCR75 – to suspend collection of the state’s per-gallon fuel taxes from July 4 to July 6 would not work as intended.

Critics of the plan said some stores could decide to fill their tanks before the tax break took effect. Any savings passed on to consumers would not be seen until after the holiday weekend, they said.

A separate resolution – HCR74 – called for rolling back the state’s per-gallon fuel taxes during the peak summer travel season. The House panel didn’t take up the effort before the regular session wrapped up late this past month.

Intended as “a needed respite from high fuel costs,” Rep. Wayne Waddell, R-Shreveport, proposed a suspension of a portion of the state’s per gallon tax on motor fuels from July 1 to Oct. 30. Like Templet’s proposal, it encouraged the state to suspend collection of 16 cents per gallon collected on fuel purchases.

The state’s per-gallon tax rate on gas and diesel is 20 cents. Four cents of the per-gallon tax would have remained untouched. The portion of the tax is routed toward a bond payment for specific transportation projects.

How the tax holidays would have affected the status of the International Fuel Tax Agreement requirements for miles driven in Louisiana is unclear.

A fiscal note on the non-binding resolution estimated about $152 million in lost revenue for the state. Templet’s measure would have resulted in nearly $4 million in lost revenue. Those funds are earmarked for the state’s Transportation Trust Fund.

There was no provision in either resolution to address how the state would compensate for the lost revenue.

Waddell wrote in his resolution that providing fuel tax relief would help stimulate the state’s economy and help residents with fuel costs that are in excess of $4.50 per gallon.

To view other legislative activities of interest for Louisiana in 2008, click here.

– By Keith Goble, state legislative editor