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Does Gas Tax Holiday Make “Cents” for New Yorkers?

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May 8, 2008

Albany, NY — New York's Republican-led Senate voted overwhelmingly in favor of a summer "Gas Tax Holiday" Wednesday, an action they say will save consumers up to 32 cents a gallon.

Blair Horner with the New York Public Interest Research Group agrees that drivers could use a break on high gas prices, but he says it's debatable whether any savings from such a holiday will actually reach the driving public. Horner says Onondaga County suspended their local gas tax in 2006, but that action backfired for consumers.

"They had done a tax cut and then did a study to see if it had any affect on prices, and it had none -- other than to blow a hole in their budget that they had to make up for with increased property taxes -- so they're eliminating the gas tax cut in Onondaga County."

Governor David Paterson has expressed reservations about the measure, because enacting a gas tax holiday in New York would cost the state as much as $500 million in lost tax revenues.

Backers of the measure say it could save consumers as much as $10 per fill-up, and they vow to go after gas stations that don't pass along the savings. Horner says that's unlikely to happen.

"It only works if people are following up, and you're talking about a three-month period. How will anyone enforce that? Are they going to expend resources and have people drive around and check prices? I think it's very hard to do."

Horner says the state Assembly is not likely to go along with the Senate's gas tax holiday, but he predicts the issue will continue to bounce around from state to state.

"Lawmakers are focused on the driving pain, when they really should be looking at what gets the biggest bang for the buck in terms of saving people money. They should think about a 'two-fer' and get some environmental benefit at the same time."

He says one example is tax breaks for home weatherization, to save consumer energy dollars while also cutting back on emissions.

Michael Clifford/Don Mathisen, Public News Service - NY