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Impact of NY state move on temporary gas tax cut

State lawmakers debated the actual amount of a reduction from 8 cents to 33 cents, to the whole 48 cents. But the final agreement is this 16-cent amount.

BUFFALO, N.Y. — Gov. Kathy Hochul announced Thursday that as of June 1 and through December, the state will suspend 16 cents from its per gallon gas tax to help benefit frustrated motorists here in New York state. 

This gas holiday will filter down to the retailers who will be able to make that reduction as of June. Since gasoline retailers must usually pre-pay taxes on delivery of gas, they were concerned the state would require that this time.

But the state worked out a process to better assist them. 

2 On Your Side asked New York Association of Convenience Stores President Jim Calvin about the potential impact on June 1.

"I'm hoping they'll see that the price is 16 cents lower than it was the day before. However, what we don't know is what the market will bring on that day, or the day before or after," Calvin said.

"If it hits at a time when wholesale gasoline prices are rising rapidly, and if retailers pass along that wholesale cost to consumers, then it could reduce or blunt the savings."

Otherwise, Calvin expects the transition to be relatively easy for gas retailers.

"If it's a certain number of cents per gallon, that's very simple and easy to implement for retailers," Calvin said. "If we are talking about percentages and other forms of taxes on fuel, that might complicate things."

As for the overall effect on motorists, two area lawmakers shared their opinions.

Democratic State Assemblymember Patrick Burke of South Buffalo told 2 On Your Side: "Will it make a huge dent for them? No, frankly not. The gas tax isn't that high, and on the back end, we're going to have to make up a lot of that money. But right now people are feeling this, and we want to do everything we can to help them, so a suspension of the gas tax until the end of the year, it's something."

Whereas Republican State Senator George Borrello feels the Democratic state leaders are being somewhat disingenuous in stating the benefit for motorists.

"It's clearly not enough," he said. "First of all, 16 cents is a drop in the bucket. To me, you should suspend that tax entirely until we figure out a better way to handle this disaster that we've experienced with the high price of energy. That would be sales tax, excise taxes, local taxes, everything; 48 cents."

We're told state lawmakers debated the actual amount of a reduction from 8 cents to 33 cents, to the whole 48 cents. But the final agreement is this 16-cent amount. 

There is awareness some of the state gas tax is supposed to be earmarked for highway maintenance and construction. But the state comptroller reported a lot of that money was not really spent on new highway projects. Others claim in the past it was also perhaps siphoned off for other state budget items.

Then some feel it should be extended to other levels of government.

"We've already having conversations with counties, asking them if they'll consider doing the same," Governor Hochul said Thursday. "So the cumulative effect is very impactful for people as they go to the pump and have that sense of stress in their chest when they think about the cost of the gas."

Also, previously U.S. Senate Majority Leader Schumer told reporters this on March 14 regarding the gas tax at the federal level: "A good number of our members are very interested in suspending the gas tax, and we'll be talking about that at our caucus and giving that a careful look." 

So is there any interest in Erie County, where the 8.75 percent sales tax is added on after all fees and taxes are added?

In essence, it's a tax on taxes, according to some legislators such as Minority Caucus Leader Joseph Lorigo.

"I know that it's a little more complicated in terms of how it would actually be done," Lorigo said. "Whether it will be difficult for all of the gas stations in the county to adjust the way they're collecting sales tax and things like that. But at a time when people are really hurting, I think it's something worthwhile to do."

We inquired but got no response from the majority County Legislature Democrats. A spokesman for Erie County Executive Mark Poloncarz responded that since this came in late from the governor, they have done more research on any gas tax reduction. He also said they must look at potential financial impacts to the county before anything happened.  

Also, it appears there is nothing really new from Washington on that talk about suspending the federal 18 cent excise tax on a gallon of gas. A spokesperson for U.S. Rep. Brian Higgins did not return our call so far.

That federal excise tax revenue is also earmarked for highway maintenance.   



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