Delaware nixes fuel tax holiday; other states continue push

| Wednesday, June 14, 2006

Consumers in Delaware who have been holding their breath for some price relief at the fuel pump should go ahead and exhale. It might be a while.

The House Appropriations Committee tabled a bill offered by House Speaker Terry Spence to roll back the state’s per-gallon fuel taxes for the summer.

Spence, R-Stratford, said he introduced the bill because the state can’t control the price of oil.

“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 said in a written statement.

The bill – HB421 – would have suspended 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 a 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 called for transferring $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. 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 voiced reservations about the plan. They said 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 recently told The News Journal.

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.

Democratic senators in Florida want a one- to two-month break from the state’s per-gallon tax on gasoline. The tax on diesel would be unchanged.

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.

Maryland Gov. Robert Ehrlich has suggested that he might support a partial rollback of the state’s per-gallon tax on diesel and gasoline.

Leading Republicans in Massachusetts are calling for the state’s excise tax on diesel and gasoline to be waived through Labor Day.

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.

In South Carolina, a bill would cut prices at the pump for three months. Sought by Gov. Mark Sanford, the effort would suspend the state’s per-gallon 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.

A West Virginia state lawmaker wants to either authorize capping the state’s excise tax or roll it back.

– By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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