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Some states seeing windfall; Ohio's 28 cents looks stable
By Associated Press
Published on Monday, Jun 09, 2008
All of the talk among political candidates about a federal gas tax holiday to offset soaring prices at the pump misses a critical fact: State taxes are, for the most part, even more costly for drivers.
And in some states, gas taxes are rising even higher, with a handful set to jump at the height of the summer driving season.
Ohio's sales tax on gasoline is 28 cents a gallon; the average state sales tax is 28.6 cents, according to the American Petroleum Institute. That's a dime more than the federal gasoline tax of 18.4 cents a gallon.
While the federal rate hasn't increased since 1997, the amount drivers pay in state taxes can jump every year — or even every day — inching up as the price does.
The national average price rose Sunday to $4 for a gallon, according to AAA and the Oil Price Information Service.
(The Akron area's average price Saturday was $3.93, according to AAA.)
While some lawmakers have talked about providing relief by suspending the gas tax, few proposals have gone anywhere. States rely on gas tax dollars to build and repair infrastructure.
In the dozen or so states where the tax is tied, at least in part, to the price at the pump, the skyrocketing gas prices have meant a tax windfall.
California, which has the highest gas tax in the nation, according to a survey by the American Petroleum Institute, would rake in $5 billion this year if the price at the pump remains at $4 a gallon. That's more than double the $2.1 billion the state collected in 2003, state revenue officials said.
John McCain, the presumed Republican presidential nominee, said he supports a temporary halt of the federal gasoline tax. His Democratic rival, Barack Obama, calls such a proposal a gimmick.
Still, some states have considered rolling back their gasoline tax.
So far, only Georgia has moved to provide relief. Gov. Sonny Perdue signed an executive order halting what would have been a state increase of 2.9 cents per gallon in July, when many families would be hitting the road for summer vacation.
Perdue suspended the entire Georgia tax on gasoline for a month after Hurricane Katrina.
''Frankly, I don't think we can justify raising taxes on gasoline in a time of economic stress for many families,'' the Republican governor said.
But the largesse has a cost: He's forfeiting roughly $80 million when the state is facing a $1 billion shortfall in transportation projects.
In Minnesota, the need for infrastructure repairs was highlighted by a bridge collapse last year that left 13 people dead. State lawmakers summoned enough votes to override a gubernatorial veto and boost the gasoline tax by 8.5 cents over five years.
Florida, North Carolina and West Virginia, Kentucky and Maine are also seeing gas tax increases this year.
In California, Illinois, Indiana and Michigan, the amount drivers pay in sales tax has been rising with the overall price of gas.
On the international front, leaders meeting in Japan on Sunday discussed what wealthy nations should do to rein in consumption, pledging greater investment in energy efficiency and green technology.
Energy ministers from the Group of Eight countries, joined by China, India and South Korea, also urged oil producers to boost output, which has stalled at about 85 million barrels a day since 2005.
All of the talk among political candidates about a federal gas tax holiday to offset soaring prices at the pump misses a critical fact: State taxes are, for the most part, even more costly for drivers.
Get the full article here.
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