Skelos Announces Governor To Sign Gas Tax Cap

Dean G. Skelos

May 19, 2006

New York State SenateDeputy Majority LeaderDean G. Skelos (R-Rockville Centre) today welcomed news that the Governor will approve the Legislature's plan to cut the state's gasoline tax, providing sorely-needed relief to motorists reeling from high fuel costs, and urgedthe Nassau County Legislature to follow the state's leadand provide additional savings.

New York will become the first state in the nation to take action to lower taxes to provide motorists relief. At least 19 other states are considering similar steps.

"The Governor's announcement that he plans to approve the gas tax cap is good news for motorists and hardworking taxpayers," said Senator Skelos. "High fuel costs are eating into family budgets and making it harder for New Yorkers to make ends meet. That's why the Senatehas made cutting the gas tax, along with general tax relief, among our top priorities of this legislative session. By lowering the gas tax and capping it, state government is doing its part to provide immediate relief, even as we work towards longer-term solutions to high energy prices."

The gas tax cap takes effect June 1, instantly saving motorists more than $220 million a year. That savings could double if counties agree to cap their own local share of the gas tax an equal amount.

"Now that the Governor has signaled his approval, it's time for the County Legislatureto add to motorists' savings by reducing their own gas tax and returning the government's windfall, that resulted from higher prices, back to the taxpayers," said Senator Skelos. "Government should not profit on the backs of struggling taxpayers."

The gas tax cut legislation, S.7909, rolls back the state sales tax on gasoline and diesel and caps it at 8 cents per gallon. (The current rate is 12 cents at current prices.) The measure gives counties, which assess their own sales tax on gas, the ability to join in the savings by capping local sales taxes at a similar, reduced level.

The bill requires gas dealers to reduce their prices by a similar amount, and sets stiff penalties -- up to $5,000 per incident -- on dealers who pocket the savings, instead of returning it to motorists.

The Senate has fought since last Summer, when gas prices began to climb, voting four separate times to roll back gas taxes and provide motorists relief.

In addition to the gas tax cap, the legislation which the Governor indicates he will approve also also includes incentives to encourage greater use of biodiesel, tax credits for the purchase of energy-efficient residential home heating systems, and a plan to make fuels like ethanol more widely available.