As the end of New York state’s gas tax holiday draws closer, some lawmakers are proposing making it permanent.
Sen. James Tedisco, R-Glenville, is asking his colleagues to return to Albany before the end of the year to pass a permanent cap on the state’s gas tax.
Suspended since June, New York State’s tax on motor fuels of 16 cents per gallon is scheduled to return on the first of January. The climbing price of crude oil due to low supply has driven high gas prices and put a strain on Americans, which prompted the decision to artificially lower the price at the pump. Some lawmakers are now calling for an extension to the gas tax holiday, with a bill introduced by Tedisco proposing some permanent changes to how motor fuels are taxed in New York.
The proposed change to New York’s tax law would require that when the price of motor fuel exceeds $2.25 per gallon, the taxes collected would drop as gas prices increase. The taxed percentage would be reduced to zero anytime the price of fuel exceeds $3.00 per gallon. This would put the state’s gas tax on a sliding scale, becoming less severe as the price increases.
The bill also includes measures that would authorize local governments to reduce their taxation on motor fuels, such as the decision to stop taxing fuels priced at over $3.00 per gallon in Nassau and Suffolk counties.
“What makes the most sense is to help consumers now by passing my cap and suspend legislation to deliver long-term relief at the gas pump anytime inflation rears its ugly head,” Tedisco said.
Long before gas prices reach $4 per gallon, under Tedisco’s bill, taxpayers would save 33 cents per gallon when fully implemented. Tedisco’s bill also would direct all future gas tax funds to a state infrastructure fund for our state roads and bridges once gas prices go back below $3.00 per gallon.
The current gas tax moratorium was put into effect by Governor Kathy Hochul just after gas prices soared to a statewide average of $4.63 per gallon in May, coinciding with an intense period of inflation that has yet to subside. Prices have dropped since then, with the statewide average cost of gas down to $3.60 per gallon in October. Costs are slightly higher upstate at $3.73 than downstate and in the New York City Metropolitan area, at $3.45 and $3.52 per gallon, respectively.
Critics of gas tax holidays say they do more harm than good, pointing out that they predominantly benefit oil companies and higher-income households who do more driving than low-income households which rely on public transportation. Such tax cuts simultaneously take away resources that could be dedicated to public transit.
Tedisco’s bill was first introduced in April, in the immediate aftermath of Russia’s invasion of Ukraine, which sent the cost of fuel skyrocketing across the globe. But even as gas prices have moderated, warnings of a recession and further global unrest and supply shortages could send the price well above $4.00 a gallon in the coming months and years.
The bill is co-sponsored by Senators Daphne Jordan, Mike Martucci, Alexis Weik and George Borello.
“Inflation and high gas prices are pinching everyone’s wallets,” Tedisco said. “With the state gas tax suspension set to expire at the end of December, now’s the time for the Legislature to come back and give New Yorkers a great present this holiday season: a permanent gas tax cap and suspension for long-term relief at the gas pump.”