Lawmakers say suspend gas tax
OLYMPIA – Republican lawmakers said Wednesday they have a plan to cut gas and diesel prices 31 cents a gallon, virtually overnight.
How? Temporarily suspend the state’s fuel tax.
“Until things stabilize, I think this would be a good thing to do,” said Rep. John Ahern, R-Spokane. “It’s a great idea.”
Giving businesses and families a respite from high fuel costs would help keep the state’s economy moving forward, said Rep. John Serben, another Spokane Republican.
House Republicans say suspending the gas tax would save people more than $266 million over three months. They’re proposing to make up the lost tax revenue by dipping into the state’s $628 million in rainy-day funds.
But persuading Gov. Christine Gregoire to go along with the plan appears unlikely.
Gregoire said Wednesday it would be a mistake to tap that money – which may well be needed to help pay for education, health care and other vital services. The federal government, she pointed out, doesn’t seem to be interested in rolling back its own 18-cent gas tax.
“The oil companies should be a primary target in looking for a solution to the high price of gas, not the citizens,” Gregoire said in a prepared statement. “Why should people in Washington state suffer fewer services so oil barons can continue to amass huge profits?”
According to the federal Energy Information Administration, the national average gas price is $3.07 per gallon, up $1.22 from a year ago and up 46 cents in just the past week.
Dale Stedman, a member of the state’s Transportation Commission, said that he personally doubts that gas stations would drop the price the full 31 cents. They’d likely pocket at least some of that in profit, he said.
That’s what seems to be happening now in Georgia, where Gov. Sonny Perdue last week ordered a monthlong moratorium on the state’s gas tax, Washington state Transportation Secretary Doug MacDonald said Wednesday evening.
The move was expected to save drivers about 14 cents a gallon, MacDonald said. But news reports from Georgia indicate that prices at the pumps have so far dropped only a couple pennies per gallon.
“So the initial read seems to be that of the 14 cents that Georgia gave up to fix roads, 2 cents went to consumers, and 12 cents disappeared somewhere,” MacDonald said. “I wonder where.”
Stedman said that the House Republicans’ proposal also begs the question: what happens if, after three months, nationwide gas prices remain high?
Lawmakers in Pennsylvania, Tennessee, Maine and Wisconsin are urging similar steps to reduce the burden of fuel costs on poor and middle-income families.
“They can’t wait for a blue-ribbon task force to complete its work,” said Wisconsin Rep. Steve Nass, of Whitewater.
But in Massachusetts, leaders of that state’s House and Senate said Tuesday that they won’t back a bill to suspend Massachusett’s 21-cent gas tax. The money is used primarily for road and bridge repairs, and it “doesn’t make any fiscal sense” to cut that money, Massachusetts Senate President Robert Travaglini said.
In Washington, Republicans say that high gas prices could cause long-term damage to the state’s economy, which only recently emerged from an unusually long-lasting recession.
“There isn’t a sector of our state that isn’t affected by high fuel prices, whether it’s a region that is driven by aerospace, agriculture, tourism or timber,” said House Minority Leader Richard DeBolt, R-Chehalis. “Our schools that have bus fleets back on the road are feeling the pinch, not to mention families who are paying $50 or more for each fill-up.”
And since state lawmakers are returning to Olympia next week for a round of fall meetings, it would be simple for the governor to call a quick legislative session to approve the change, he said.
Republicans blasted the Democrat-written state budget this spring, calling it unsustainable and saying that it left far too little in the state’s rainy day fund for emergencies. But since then, the state’s growing economy has brought in more revenue than expected, Ahern said, meaning that Washington could now tap those reserves to cover the cost of suspending the gas tax temporarily.
“We’ve got money coming in,” he said.
Senate Transportation Committee Chairwoman Mary Margaret Haugen said the state should be cautious, especially with Boeing in the middle of a strike.
“We cannot predict what emergencies the state might encounter over the next few months,” she said, calling the Republicans’ proposal “irresponsible.”
“Why aren’t they calling for the oil companies to suspend their profits?” said Haugen, D-Camano Island.