Oil company profits were over $136 billion last year. Rather than initiate an effective energy policy that returns windfall oil profits to customers and goes after price gouging, the Assembly Minority is offering a ‘bait and switch’ in the form of a temporary gas tax suspension – paid for by taxpayers.
Two years ago New York State capped the state sales tax on gasoline priced over $2 per gallon, which did nothing to stop the oil companies from raising gas prices. I warned then that capping the tax was a short-term plan that would not work. With no national energy policy, we are all paying the price of inaction and we are all paying for Big Oil’s huge profits. For example, conglomerates like Exxon Mobil are raking in $1,300 per second in profit.
In 2007 Exxon Mobil had $40.6 billion in profit, the largest ever recorded by an American company. One look at the first quarter of this year shows they’re headed for another shameful record, one made at the expense of our citizens.
The rising cost of gasoline does not translate to greater tax revenues for the state since we’ve already capped New York State gasoline taxes for two years, and that’s based on the number of gallons purchased – not the cost of gasoline. Even economists are warning about blatant pandering that doesn’t focus on the real culprit.
The fatal flaw in this poorly thought out measure is there is no guarantee the average consumer will even see savings. In fact, the oil companies will more than likely raise their prices in order to negate any potential cost savings to the public – as evidenced since our 2006 cap.
Implementing a gas tax ‘holiday’ forces taxpayers to pay the nearly $500 million currently dedicated to statewide road and bridge construction. Because there’s no ‘free lunch,’ it essentially would rob the general fund of key resources to pay for education, health care and public safety, all while letting Big Oil raise prices further. In the end, our citizens will have to pay.
This ‘bait and switch’ – dressed up as a ‘quick fix’ – needs serious fixing. New York’s hardworking families have suffered enough. I urge all my legislative colleagues to do the right thing and get to the root of the problem – demand the Bush/Cheney Administration stop protecting the $2 trillion business of essentially five major integrated oil companies and act now to deliver energy-effective policies that put the consumers first and drop the price of gas immediately.