Delaware lawmaker calls for three-month fuel tax holiday

| 5/24/2006

In an effort to appease constituents who are feeling pain in their pocketbooks at each fill-up, a leading Delaware House lawmaker wants to roll back the state’s per-gallon fuel taxes for the summer.

“The state can’t control the price of oil,” House Speaker Terry Spence said in a written statement. “The only impact we can make on the price at the pump is to eliminate the state fuel tax. It’s an admittedly modest cut, but at least it will help reduce the burden on our citizens.”

Spence, R-Stratford, has introduced a bill that would suspend the state’s excise tax on diesel and gasoline for June through September. The state now collects 22 cents per gallon on diesel and 23 cents per gallon on gasoline.

How the tax holiday would affect the status of the International Fuel Tax Agreement requirements for miles driven in Delaware is unclear.

To offset the lost revenue from the moratorium, the bill would transfer $50 million from the state’s general fund to the Transportation Trust Fund. The fund mostly pays for construction and maintenance projects.

Spence said the state has more than $104 million in unappropriated cash in the current fiscal year alone. A portion of the surplus should be returned to taxpayers in the form of lower fuel prices, he said.

Gov. Ruth Ann Minner and leading Senate Democrats, though, have reservations about the plan. They say it’s bad money management.

“I’m sure all of us would like to have a (fuel) tax holiday 12 months of the year. But we have to be responsible with our money,” Minner told The News Journal.

Spence said the bill – HB421 – would likely come up for consideration the first week of June. It is in the House Revenue and Finance Committee.

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 on diesel and gasoline for the summer. A special session would need to be called for lawmakers to address it.

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 Minnesota House lawmaker has introduced a bill that would suspend the state’s 20-cent-per-gallon tax on gasoline-based fuels for six months. The same tax on diesel would remain intact.

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.

In New Hampshire, a Republican gubernatorial hopeful 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.

New York Gov. George Pataki’s signed a bill into law “capping” the sales tax on diesel and gasoline. 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 new rule takes effect June 1.

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