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NY Considers Gas Tax Cut As Prices Rise

Shell Gas Station 124th Street/Eliot Schiaparelli

SARAH YOKUBAITIS, HOST: Gas prices are up over a dollar since the beginning of the year and consumers are feeling it. And that means the pressure is on for New York Governor Kathy Hochul. To keep voters happy she’s offering up a 16 cent per gallon tax cut. But many economists say that strategy may not work. Uptown Radio’s Eliot Schiaparelli has more on the strategies politicians are using to solve a problem they can’t.

ELIOT SCHIAPARELLI: Gov Brown is filling up the tank of his black sedan at the Shell station on 124th Street. Johnny Fogle, the gas station attendant, is helping him.

JOHNNY FOGLE: He paid $50 for 10 gallons"

GOVERNOR BROWN: Yes it’s ridiculous.

SCHIAPARELLI: Tax cuts similar to what Hochul’s proposing have already passed other states as a ‘gas tax holiday.” If it passes in New York, next time Brown fills up he’ll save about a dollar sixty. He says saving 16 cents is not enough to make a difference.

BROWN: Not 16 cents, no.

SCHIAPARELLI: But politicians are trying the holiday and they think it’s a flashy move that’ll appease voters.

CARL DAVIS: People are so aware of gas prices, they put up on those big signs outside the stations driving by them every day.

SCHIAPARELLI: Carl Davis is with the nonprofit Institute on Taxation and Economic Policy

DAVIS: And so lawmakers say, hey, we have a solution to bring down those numbers you're seeing on those big signs.”

Recently, Davis wrote a blog post titled “State Gas Tax Holidays are Nothing to Celebrate.” He called the idea the worst state tax proposal to surface this year. But he says politicians feel like they have to do something. Especially because this is an election year.

DAVIS: It's a, you know, political motivation behind it.

SCHIAPARELLI: He says gas tax cuts won’t help consumers save money. And he has another concern. Those taxes are often dedicated to infrastructure - things like mass transit, bridge repairs and repaving of roads.

GIACOMO SANTANGELO: Putting down new pavement, petroleum or asphalt itself as a petroleum product. That cost is through the roof.

SCHIAPARELLI: Giacomo Santangelo directs the international Political Economy program at Fordham University. He agrees, a 16 cent tax cut probably won’t help the average consumers. But he says there’s not much else local politicians like Governor Hochul or even those higher up can do.

SANTANGELO: When the President was elected, he made a comment, that seemed like a good idea, I guess, which was, I guarantee that gas prices will not increase. That's not a thing like you can't, you can't do that. SCHIAPARELLI: Santangelo says there is no one person who has the power to prevent gas prices from increasing.

SANTANGELO: And even if that person did exist, they're not in the United States, they're in Saudi Arabia.

SCHIAPARELLI: He says for many Americans the only precedent for the current inflation levels for gasoline is the 1970s oil crisis.

SANTANGELO: Most people right now have not experienced this kind, of gas price increase in their lifetime.

SCHIAPARELLI: That 1970s crisis sent politicians scrambling to lower gas prices. They created all sorts of regulatory changes including fuel standards and federal speed limits but even those fell short until supply increased.

And today according to Santangelo lawmakers are once again faced with high gas prices due to a supply issue with no real end in sight. He says the idea that the war in Ukraine is the only problem is a misconception. It’s far more complicated involving the pandemic and a long running supply shortage with oil from the Middle East and Africa. Which leaves politicians with a problem on their hands.

SANTANGELO: It's definitely not going to look good for politicians, if the price of gasoline continues to increase, which people are estimating it will do.

SCHIAPARELLI: New York is renegotiating it’s budgets. So Santangelo and the Institute on Taxation and Economic Policy’s Carl Davis say politicians would be smartest if they spend on Childcare and healthcare. Ultimately that will buy politicians more success with voters than a gas tax holiday.

Eliot Schiaparelli, Columbia Radio News


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