Massachusetts may cut fuel tax; other states pursue similar plans

| 5/31/2006

With prices at the pump hovering near $3 per gallon, leading Republicans in Massachusetts want to waive the state’s 21-cent-per-gallon fuel tax through Labor Day.

House Minority Leader Bradley Jones Jr., R-North Reading, has proposed a diesel and gasoline tax holiday.

The effort, however, doesn’t address the status of the International Fuel Tax Agreement requirements for miles driven in Massachusetts. So, even if the tax is suspended at the pump, truckers could end up owing it at the end of the quarter when they file their IFTA paperwork and payments.

Lt. Gov. Kerry Healey, who is a Republican candidate for governor, and her running mate, Reed Hillman, are backing the moratorium that would cost the state about $200 million in lost tax revenue.

Hillman told “Land Line Now” that waiving the tax for the summer would be a big shot in the arm for the Massachusetts tourism and trucking industry.

“We could bring a lot of economic activity into Massachusetts,” Hillman said.

“People might take a vacation or rent a car and travel around and visit our museums and restaurants. We think (revenue from) the meals tax and the hotel/motel sales tax would go up and we would attract truckers stopping at a Massachusetts truck stop rather than Connecticut, Rhode Island or Maine. They are going to spend some money while they’re in the store. That’s going to help with the economic stimulus we want.”

Gov. Mitt Romney, however, came out against the plan. The Republican governor said he thought it would offer an easy excuse for motorists to continue driving less fuel-efficient vehicles and not take steps to conserve, the Berkshire Eagle reported. Many Democrats shared similar concerns.

Others said the tax cut would endanger spending on other state initiatives, such as education and healthcare.

Supporters say a reserve account could be tapped to pay for road and bridge work that the fuel tax helps support. The account is valued at about $1.7 billion, the Cape Cod Times reported.

Rep. Cleon Turner, D-Dennis, has crossed party lines to push for the waiver.

“Until Congress and the president do something about the skyrocketing costs of gas, we in the Massachusetts Legislature have a responsibility to act,” Turner said in a written statement.

The bill draft is HD5214. It is in the House Rules 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.

In California, a bill died in committee that sought to eliminate the state’s sales tax on gasoline. A provision to include the same price break for diesel fuel purchases was dropped from the bill.

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.

In Delaware, the House Speaker 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.

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.

In South Carolina, a bill sent to a House-Senate conference committee would cut prices at the pump for three months. Sought by Gov. Mark Sanford, the effort would suspend the state’s 16.75-cent tax on diesel and gasoline from Oct. 1 through Dec. 31.

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
Staff Reporter Mike Throop contributed to this report.