Proposals to cut prices at the pump are popping up throughout the country as lawmakers look to appease fed-up constituents who are paying nearly $3 per gallon for fuel in many areas.
In New York, the Legislature has approved putting a “cap” on the sales tax on diesel and gasoline. The bill now heads to Gov. George Pataki, who said he will sign it.
The sales tax cap calls for the state to add sales tax to only the first $2 worth of a gallon of diesel or gasoline. That would cap the tax at 8 cents per gallon – saving consumers about 4 cents per gallon at current prices. For counties and local governments, the cap is optional.
The tax, which doesn’t affect the status of the International Fuel Tax Agreement, is set at a percentage of the price of fuel, and rises and falls based on the sales price. At $3 per gallon, the state collects 12 cents per gallon in sales tax. Counties and other localities add an additional levy between 12 to 15 cents.
It would cost the state about $225 million annually, which Pataki said is cause for concern. The losses would double if local governments go along with the cap.
The bill – A11331 – would fine fuel station owners who do not lower prices to coincide with the tax. Violators would face up to a $5,000, per occurrence. The bill would also require the New York Thruway Authority to make alternative fuels, like biodiesel and ethanol, available at stations along the roadway by the end of 2007.
Both provisions are sought by the governor. If the governor signs the bill into law as expected, it would take effect June 1.
Other states where fuel cost relief actions are being sought include:
An Alabama House Democrat has requested that Republican Gov. Bob Riley open a special session so lawmakers can discuss a possible repeal of the state’s fuel tax. Nothing is in writing yet and no word on whether diesel would be included in any tax breaks.
Connecticut Gov. M. Jodi Rell said she would consider a legislative effort to suspend the state’s per-gallon tax for the summer. A special session would need to be called for lawmakers to address it. There is no indication yet if it would include taxes on diesel.
Georgia Democrats are calling for a 60-day moratorium on the state’s per gallon taxes on fuel. Republican Gov. Sonny Perdue suspended the collection on fuel for one month last fall.
A Republican hopeful for the Nevada governor’s seat is calling for the state’s portion of the gas tax to be repealed. The proposal doesn’t include diesel.
A Minnesota House lawmaker has introduced a bill that would suspend the state’s 20-cents-per-gallon tax on gasoline-based fuels for six months. The same tax on diesel would remain intact.
A Republican gubernatorial hopeful in New Hampshire is calling for a suspension of the state’s per-gallon tax on diesel and gasoline for the summer.
Some Republican lawmakers in New Mexico have plans to push Democratic Gov. Bill Richardson to round up the Legislature for a special session to discuss suspending the state’s tax on diesel and gasoline.
North Carolina Gov. Mike Easley, a Democrat, has asked state lawmakers to cap the state’s per gallon tax on diesel and gasoline so that the rate will not increase from the current level. The state’s fuel tax can change every six months because a portion is set on recent average wholesale prices. The next change could take place in July. House Democrats also have plans to keep the fuel tax from increasing this year.
Democrats in the Texas House are calling for a 90-day suspension of the state’s 20-cent-per-gallon tax on motor fuels.
– By Keith Goble, state legislative editor