Gas Tax "Holiday"
Earlier this week, Senate Republicans put forth legislation (S.7594-B) which would create a gas tax "holiday" from Memorial Day to Labor Day. I and many of my Democratic colleagues voted against this legislation because it is bad fiscal and environmental policy that will only result in windfall profits for oil companies and no real relief for consumers. My colleagues and I understand New Yorkers have been hit hard by rising fuel costs. However, what we need are not gimmicks, but carefully thought out policies that will create long-term solutions to the growing energy crisis facing our state and decrease our dependence on foreign oil.
S.7594-B, introduced by Senator Andrew Lanza (R-Staten Island), would exempt gasoline and diesel from the State's excise tax, Sales Tax, and Petroleum Business Tax, from May 23, 2008 to September 2, 2008. These taxes are currently used to provide funds for highways, roads, bridges, and mass transit. By suspending the taxes the Senate Republicans will create an estimated $600 million budget gap for these necessary services.
This bill is obviously meant to prey on the desperate need for relief of New York's suffering drivers, but in reality this bill will only worsen the economic crisis in New York, and at best result in little to none of the intended aid. Increased demand will lead to higher prices and negate any positive effect the gas tax "holiday" was meant to have.
One of the biggest problems with S.7594-B is that it will not even ensure that the tax savings will be passed along to the consumer. The gas tax suspension will happen at the distribution level and there is no way to guarantee that prices will reflect this suspension when the consumer goes to buy gas from a local retailer. Prices can be inflated at any point in the chain of fuel distribution, which goes from manufacturer to supplier, to wholesaler, to distributor, and finally to the retail seller.
The current bill has no teeth. There have to be serious disincentives against price gouging. The legislation lacks any mechanism for determining which companies to sanction because of the difficulty of identifying where in the chain of distribution the price gouging occurred.
My Democratic colleagues and I proposed a number of alternatives to this proposal —all of which were rejected by the Republicans — which included:
- Initiating a middle income sliding scale gas and diesel fuel tax rebate program, which would provide some amount of tax rebate to New Yorkers who earn $75,000 or less and have a vehicle registered in New York. This proposal is controversial among some environmental advocates who rightly point out that decreasing the cost of fuel (even modestly) can lead to greater usage. But this proposal is intended to recognize that in many parts of the State, absent public transportation options, people have no alternatives to needing their cars and the rapidly skyrocketing gas costs are causing real harm to low and moderate income households.
- Implementing a long-term solution to our dependence on foreign oil by increasing energy conservation and shifting New York to the use of renewable energy sources.
- Instituting criminal penalties for price gouging and increasing fines of offenders to $25,000.
- Reducing the gas consumption by the State's motor vehicle fleet through the creation of a State workforce fuel reduction and conservation program.
- Creating a task force to monitor gas pricing systems across the State and to study why prices are lower in some neighboring states.
Technically, S.7594-B now is passed to the Assembly for consideration. Assembly Speaker Silver has already voiced his opposition to the bill, as has Governor Paterson, so I hope that instead of continuing down this road we will all do what is most beneficial for New Yorkers -- develop a long-term energy policy that will reduce consumption and promote renewable, clean energy sources.
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Energy | Environment | Gas Tax
Two notes
Submitted by Dan Jacoby on 9 May 2008 - 4:49pm.
First, let's not forget the mid-term effects of waiving the tax on gasoline through the summer. During the summer, the oil companies, distributors, etc. will simply raise their prices so we won't see significant savings. But come fall, when the tax goes back into effect, we'll all be paying more.
In other words, this "gas tax holiday" is just another way for the oil companies to make more money.
My second note has to do with Sen. Krueger's phrase "increasing energy conservation." I remember Ronald Reagan decrying this phrase as meaning "huddling in sweaters in the dark." Unfortunately, that's the image associated with this phrase. May I recommend "increasing energy efficiency" instead? The image here is that we're smarter (because more efficient people are smarter), and that we can save money without making a sacrifice.
One example, here in NYC, of an "energy efficiency" measure is Intro 264, a bill introduced by Gale Brewer in 2006 that would prohibit businesses from propping their doors and windows open while the air conditioner is running. Not only would that increase efficiency, but it would also lower the demand for energy when demand is at its highest. The result would not only be a lower chance of midsummer blackout, but also reduced need to use our oldest and most polluting power plants.
The bill currently has 14 cosponsors (Gonzalez, Koppell, Mark-Viverito, Martinez, Recchia Jr., Vallone Jr., Weprin, Garodnick, McMahon, Nelson, Lappin, Gioia, Liu and Monserrate). That's not nearly enough; we need to ramp up pressure to pass this bill, and require not only that all new building meet higher energy efficiency standards, but also that current building be examined for ways to become more efficient.
The difference between an energy-efficient building and an inefficient one can be as much as 7:1 -- that is, some buildings can use up to seven times as much energy as others. There are a lot of things we can do to become more efficient.
I agree. Thanks for taking the principled position here.
Gas tax reductions or holidays are a wrong path. I strongly prefer reasonable conservation measures to those which promote increased gasoline use.