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Assemblyman
Brian M. Kolb
Assembly District 131
 
Constituent Sound Off: Bob Yaekel Of Canandaigua Asks About The Gas Price-Gas Tax Connection
Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
February 10, 2012

My recent Town Hall meetings across Ontario County were another HUGE success! A very special thank you to everyone who took time out of their busy Saturday to attend and share smart ideas for sensible solutions. Constituent suggestions are important; they can quickly become the basis for legislation or casework that solves a problem with a State Agency, cuts through layers of needless bureaucracy and makes New York a more affordable place to live and work.

CONSTITUENT IDEAS, QUESTIONS NOT LIMITED TO TOWN HALL MEETINGS

However, good ideas (and even better questions) from constituents are not simply limited to my Town Hall meetings. In fact, my Geneva district office routinely receives thousands of calls, e-mails, letters and faxes from constituents seeking answers to their questions about state government or some matter of public policy affecting all New Yorkers. For this week’s legislative column, I would like to answer one such question that affects us all: rising gas prices.

BOB YAEKEL OF CANANDAIGUA WANTS TO KNOW MORE ABOUT THE CONNECTION BETWEEN NY’S GAS PRICES AND GAS TAXES

A constituent of mine – Mr. Bob Yaekel, of Canandaigua – recently contacted my office suggesting a column focused on the connection between New York’s high gas prices and New York’s high gas taxes. With gasoline prices forecast to rise to $4 - and possibly $5 - per gallon this year, the question could not come at a better time. Bob, this column is for you!

NY’S TAXES AND FEES KEEP PRICE OF GASOLINE ARTIFICIALLY HIGH

As this weekly column is being written – the second week of February 2012 – the average price for a gallon of regular gasoline is $3.79 (Source: Gas Buddy). As a point of comparison, the average price for a gallon of regular gasoline in neighboring New Jersey is $3.44, and in nearby Pennsylvania, the price is $3.58. So, what accounts for this price disparity – and why are New York motorists paying, on average, anywhere between $3 to almost $5 more each time they fill-up (for a 15-gallon tank) versus what folks in New Jersey and Pennsylvania pay?

The answer can be summed up in two words that New Yorkers know all too well: taxes and fees.

NEW YORK’S TAXES AND FEES MEAN THAT MOTORISTS PAY MUCH MORE AT THE PUMP!

State government imposes 33 cents per gallon in taxes on motor fuel, and 31 cents per gallon in taxes on diesel motor fuel. These figures of 33 cents and 31 cents are actually broken down into three separate taxes:

  • “State Petroleum Business Tax” – 17 cents per gallon on motor fuel and 15.25 cents per gallon on diesel motor fuel;
  • “State Excise Tax” – 8 cents per gallon on motor fuel and diesel motor fuel; and
  • “State Sales Tax” – This is already CAPPED at 8 cents per gallon and 8.75 cents per gallon in the MTA region (downstate, New York) on both motor fuel and diesel motor fuel.

Revenue generated from the State’s Petroleum Business Tax and Excise Tax is dedicated to the Mass Transportation Trust Fund, the Highway and Bridge Trust Fund, and the Mass Transportation Operating Assistance Fund, while revenue generated from the State Sales Tax is deposited into the State’s General Fund.

DON’T FORGET ABOUT STATE FEES, FEDERAL AND LOCAL TAXES!

In terms of State fees imposed on gasoline and diesel fuel – these fees are on top of all the taxes listed above – New York also imposes a flat 0.35 cents (0.35 of 1 cent)/gallon in fees on Motor and Diesel Motor Fuel. Similar to New York’s gas taxes, this figure is comprised of two fees:

  • “Petroleum Testing Fee” – 0.05 cents/gallon and is deposited into the “Motor Fuel Quality Account” to cover monitoring to ensure the fuel contains the proper chemical makeup; and
  • “Oil Spill Fund Fee,” which is 0.3 cents/gallon and is deposited into the “Oil Spill Fund” to help offset costs if an oil spill occurs.

In addition to all the aforementioned State taxes and fees, Federal taxes also come into play and further drive-up how much it costs to fill-up:

  • “Federal Excise Tax” – 18.4 cents per gallon on motor fuel and 24.4 cents per gallon on diesel motor fuel.

Last, but certainly not least, Local taxes also factor into New York’s high gas price equation. Localities impose their own portion (rate varies between municipalities) of sales tax on motor fuel and diesel motor fuel at their authorized local sales tax rate, typically ranging from three to 4.75 percent. They are authorized to also cap their sales tax at a cents-per-gallon similar to the State’s Sales Tax.

ADD IT AND WEEP: ALL THOSE TAXES AND FEES ADD 66 CENTS PER GALLON TO THE PRICE YOU PAY AT THE PUMP

For those keeping score at home, here is how all those taxes and fees add up:

State Gasoline Taxes, Total: 33 cents

  • $0.08 Excise Tax;
  • $0.08 State Sales Tax; and
  • $0.17 Petroleum Business Tax

State Gasoline Fees, Total: .35 of 1 cent

  • $.0005 Petroleum Testing Fee; and
  • $.0030 Oil Spill Fund Fee

Federal Gasoline Taxes, Total: 18.4 cents

  • $0.184 Federal Excise Tax

Local Gasoline Taxes, Total: 14 cents

  • $0.14 Local Sales Tax

Grand total of State, Federal, Local government taxes and fees on a gallon of regular gasoline: 66 cents, or 17 percent.

WANT LOWER GAS PRICES? CUT THE TAXES AND FEES ON GASOLINE!

While the global economy, turmoil in the Middle East, fluctuations in the supply and price of crude oil, reduced refinery capacity and lack of a serious domestic energy exploration program all contribute to rising gas prices, the reality is that State, Federal and Local taxes and fees add 66 cents to the price you pay for every gallon of gas.

For a mid-size car with a 15-gallon gas tank that added 66 cents translates into an extra $9.90 every fill-up. Multiply that $9.90 by four times (monthly) and the added cost now climbs to $39.60. Multiply the $9.90 figure by 52 weeks (annual), and you are looking at an increased additional expense of $514.80 yearly – and these conservative cost projections are based on just one car!

No matter what the politicians or bureaucrats try to tell you, the solution to high gas prices is not complicated: reduce taxes and fees. Cut the taxes and fees on gasoline and diesel fuel and you will immediately cut the price of these fuels to motorists. Bob, thank you for your question!

As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at kolbb@assembly.state.ny.us.

 
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