Gas prices drop a little--but is it enough?

6/2/2022

By Patsy Nicosia

Drivers got a welcome break at the gas pumps Wednesday:
A 16 cent break in state taxes.
The “gas holiday” runs June 1-December 31 and includes an eight cent savings from the removal of New York State’s excise tax on gas and an additional eight cents from the removal of the state sales tax on gas.
Some counties are adding on gas tax breaks of their own, but for now, Schoharie County supervisors are waiting to act, concerned the savings will just end up in the pockets of suppliers,
Gas prices averaged about $4.85 a gallon Tuesday—the same as the statewide average.
In April, as part of the state budget, Governor Kathy Hochul authorized counties to opt into the gas tax break, giving them until May 2 to decide.
The next opening is in September, which means supervisors would have to act to opt in in July.
Counties can cap the sales tax on gas at the $4, $3, or $2 level; by way of example, that means if the tax is capped at $3 per gallon, it would be like paying a tax on a gallon of gas that costs $3, New York State Association of Counties Deputy Director Mark LaVigne explained.
In Saratoga County, which opted in, the estimated the savings to motorists will add up to $4 million with gas prices in the $4 a gallon range.
However, it will also mean a $4 million drop in county gas sales tax revenue.
Before the “holiday” Saratoga County had taxed gas at the same rate as other sales: three cents on the dollar.
Now, it’s switched the gas tax to a flat six cents per gallon.
Wright Supervisor Alex Luniewski, who chairs the county’d Finance Committee, told supervisors he made some calls—and spent six on hold with State Tax and Finance--trying to calculate the best route here.
And even after he gave up and reached out to NYSAC, he had more questions than answers.
“His [NYSAC’s Dave Lucas, director of Finance and Intergovernmental Relations] first comment was that it’s a fairly convoluted system,” Mr. Luniewski said.
It’s hard to track savings and gas prices, Mr. Lucas said, and the loss to sales tax revenues could also have a big impact.
“Gas goes up like a rocket ship and down like a feather,” Mr. Luniewski said, agreeing to dig in deeper. “I agree we’re got to do something, but…a lot of counties have said they just won’t do it.”
Supervisors also questioned whether taking the 7.3 cent local gas tax off would just mean more profit for suppliers.
“How do you know suppliers aren’t just going to jack up the price?” asked Fulton Supervisor Phil Skowfoe, something Carlisle Supervisor John Leavitt pointed out they’ve already done with diesel fuel.
When gas prices soared 10-12 years ago, said County Attorney Mike West, supervisors took off the local gas tax and put it into a reserve “to get ahead of distributors.”
County Treasurer Mary Ann Wollaber-Bryan said according to information gathered by the County Treasurers Association, when Albany County pulled its gas tax in 2006, savings were absorbed into the price.
“It was a windfall for the oil companies,” she said.
Counties adopting gas tax caps include Erie, Livingston, Niagara, Oswego, and Onondaga.