Volker Announces Senate Plan To End State Gas Tax Windfall, Helps Seniors Stay Warm

William T. Stachowski

September 06, 2005

(ALBANY, NY) Senator Dale M. Volker (R-I-C, Depew), along with members of the Senate Majority, announced a proposal to end to government "profiteering" on high gas prices. The plan calls for a cap on the sales tax to provide immediate price relief to motorists, and the utilization of those sales tax receipts already accumulated gas tax windfall to help seniors stay warm this winter.

"We are all feeling the hit at the gas pumps and this is creating an undue financial hardship for hardworking families across western New York," said Senator Volker. "We all need to do our part to find a way to make fuel prices fair and reasonable. Besides promoting conservation efforts to decrease the demand for oil and gasoline, the State Legislature has the ability, and the obligation in my opinion, to reduce the tax burden on gasoline to assist our families and businesses until the energy markets stabilize and capacity increases."

Senator Volker, along with members of the State Senate Majority, have created legislation to roll back the gas tax and replace it with a fixed state-local levy, providing motorists immediate savings up to eight to 10 cents per gallon on fuel purchased at more than $2 per gallon. Unlike the existing levy, the new gas tax would not rise as prices increase, thereby eliminating any future windfall to state and local governments.

Additionally, this newly proposed legislation also creates a new "Senior Heat" program, which will provide direct, one-time, rebate checks of $100 or more to assist at least 640,000 New York seniors eligible for the Enhanced STAR property tax program in meeting their increased energy bills this winter. Enhanced STAR is available to seniors 65 years and older who earn under $65,000 per year.

The program is to be funded with revenues from the gas tax windfall, now projected at $42 million, but estimated to grow to $100 million or more by the end of the fiscal year.

"The current energy concerns have a ripple effect into other areas, especially the home heating oil and natural gas arenas. During this Winter, the potential for steep increases in energy costs could be severe and we must take action now so that fixed-income seniors will not have to make the choice between staying warm and meeting life's other necessities," said Senator Volker. "We need to act responsibly now."

In addition to soaring gas prices, the price for natural gas and heating oil has risen dramatically since last winter. According to NYSERDA, the average fuel oil price rose from $1.76 per gallon one year ago to $2.43 per gallon last week -- a 38 percent increase. New York homeowners consume an average 800 gallons of fuel oil each winter. Natural gas costs are expected to show similar increases.