Contact: Phil Oliva, (518) 455-3756
For Immediate Release:
Wednesday, April 26, 2006

Assembly Minority Members Push For Gas Tax Cap, Alternative Fuels
Promise a fight over issue that's "crippling working class New Yorkers"

Assembly Minority members today proposed a two-step measure to bring relief to New York motorists, renewing a call for a gasoline sales tax cap for any amount above $2.00 per gallon and also proposing an "Alternative Fuel Incentive Fund" to promote the research, development and usage of alternative energy fuels such as ethanol and bio-diesel.

The tax cap measure, which has passed in the Senate, was defeated in the Assembly 77-64 on April 11, with 77 Majority members voting to retain the tax. Minority members say they will force another vote for the cap which will save motorists about $.10 per gallon based on current gas prices that are over $3.00 (county governments would have the option of reinstating the local sales tax if they so choose).

New York motorists are paying 65 cents per gallon in taxes - the highest rate in the Northeast. Included in the price of a gallon of gasoline is a motor fuel excise tax, petroleum business tax, a testing fee, a spill tax, a federal excise tax and state and local sales taxes. New York State is one of only a handful of states to subject gasoline to sales taxes. The sales tax is the only tax that is pegged to the price of gas meaning that as motorists struggle to pay higher fuel prices, the state is reaping a windfall.

In addition, Minority members proposed accelerating the state's transition away from a fossil fuel transportation economy to one that is ever more reliant on alternative and renewable energy sources a move that will lower fuel costs by lessening the demand for gasoline. Minority members are proposing to place the state sales tax revenue generated from the second dollar of gas ($1.00 to $2.00) into the Alternative Fuel Incentive Fund. It is estimated that the proposal would generate $265 million annually to provide tax credits, grants, investments and other incentives to encourage ownership of hybrid and flex-fuel vehicles and the building of alternative fueling stations and refineries. Currently all sales tax revenue goes into the General Fund.

Assembly Minority Leader James Tedisco (R,C,I-Schenectady-Saratoga) said rising gas prices are crippling working middle-class New Yorkers and government can and must act now. Tedisco said his conference is seeking both a short-term relief measure (gas tax cap) and a mid-to-long-term solution (alternative fuels) that would help not only motorists save at the pump but also boost the economy, strengthen the environment and bolster national security.

"Capping the gas sales tax at $2 must be the first step. The state is reaping a windfall from rising gas prices and some of that money must be returned to motorists suffering at the pump. For the Majority members to vote against this very modest relief measure is mind-boggling," said Tedisco. "But beyond that we believe that the only real long-term solution to solve this growing crisis is to transition ourselves off our addiction to foreign oil. We must accelerate this transition. We solve a lot of problems if we are successful, lower fuel costs through lessened demand for gasoline, a cleaner environment, more agricultural jobs, more manufacturing jobs, and greater national security through greater energy independence. New York can and should lead this effort."

"The temperature outside is not the only thing rising," said Assemblyman Brian M. Kolb (R,C-Canandaigua). "Gas prices continue to rise at a steady pace and motorists in this state can no longer sustain increased costs. The state has the ability to save New Yorkers money by suspending the state and local portions of the sales tax on motor and diesel fuel that exceeds $2.00 per gallon. Communities such as the ones I represent in the Finger Lakes region rely on tourists for their economy to survive, and if we don't act to make driving vehicles more affordable, the effects on their businesses will be devastating."

"Farmers are particularly impacted by today's high fuel prices, which are coming right at the start of planting season, when we use the most fuel to power our tractors," said Jeff Williams, Legislative Director of the New York Farm Bureau. "New York Farm Bureau is committed to helping develop new, cost effective renewable energy sources to reduce our dependence on foreign oil. New York State farmers can and will grow the crops to produce ethanol and biodiesel, which will help meet our energy needs in the future."

"The state is placing taxes upon taxes and forcing retailers to pass the pain on to consumers who are already being hit by sky-high gas prices," said Mac Brownson, President of the New York State Association of Service Stations and Repair Shops. "Assemblyman Tedisco is a real friend to consumers by strongly calling for a cap on the state's gas tax. This is the right thing to do for motorists."

The United States is the top consumer of oil worldwide, consuming 300 times more than China, the second largest oil consuming nation.

"Oil companies are not the only entities reaping record profits," said John A. Corlett, spokesman for AAA New York State. "As consumers struggle to pay higher and higher gasoline prices, the state is reaping a substantial and unanticipated revenue windfall from the increased prices. To provide New York motorists with immediate relief from the escalating burden, AAA New York strongly supports efforts to cap the sales tax on gasoline. The state should simply not profit while drivers struggle to pay rising pump prices."

"We have to act now to put the financial resources together to invest in a cleaner, safer more economic energy future," said Adrienne Esposito, Executive Director of Citizens Campaign for the Environment. "By establishing a dedicated fund for alternative fuels, this innovative legislation paves the way for resolving our harmful addiction to fossil fuels."

Tedisco said he believes hydrogen-powered vehicles are the long-term solution, but said that Hybrid vehicles and Ethanol fuel are available now and should serve as the bridge to begin the transition from Point A to Point B.

The $265 million in the Alternative Fuel Incentive Fund would be dedicated as follows:

* $90 million for a personal income tax and corporate franchise tax credit equal to $500 per hybrid or fuel-flexible vehicle purchased. This initiative is designed to encourage the purchase of these vehicles by consumers.

* $90 million to fund an allocated credit for the installation or conversion of fueling stations for alternative fuels. This credit is designed to increase the availability of alternative fuels to consumers of "flex-fuel" vehicles. This credit would equal 30 percent of the costs associated with equipping a refueling facility to sell alternative fuels.

* $30 million made available to academic institutions and public/private consortiums dedicated to research and development regarding fuel diversification and energy efficiency in the transportation sector.

* $27 million to provide each of the 27 travel plazas on the Thruway with alternative fueling stations.

* $20 million for construction of a cellulosic ethanol refinery.

* $3 million to eliminate the state and local sales tax and motor fuel excise tax on alternative fuels.

* $5 million for additional administrative costs.

In addition, Minority members also proposed opening up the five current E-85 fueling stations in the state to the public.

There are approximately 50 models of vehicles, representing more than five million cars on the road today that are considered "flex-fuel" meaning they can take E-85 fuel - a fuel that is 85 percent ethanol and 15 percent gasoline.

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