Assemblyman Bill Magnarelli (D-Syracuse) announced the Assembly has proposed a comprehensive plan he sponsored to bring much-needed relief to motorists by capping the state’s tax on gasoline and diesel fuel – saving consumers potentially $400 million (A.11228). This multi-faceted proposal not only caps the sales tax on gasoline and diesel fuel at $2.00 per gallon, combats illegal price gouging, and requires greater accountability from major oil companies, it also increases the availability of alternative fuels along the state Thruway.

Eliminate Gas Sales Tax

Currently, motor fuel is subject to a state sales tax, which rises as the price of gas goes up. However, the Assembly’s proposal would eliminate the consumption-based sales tax and replace it with an 8-cent per gallon user tax – preventing New Yorkers from paying higher taxes on escalating fuel prices and saving $200 million a year. At current prices, this would show up as an immediate savings of four to five cents a gallon.

“Unlike the sales tax, a flat amount per gallon is fixed – meaning it won’t increase when the price is raised. At the same time, we encourage motorists to consume less at lower prices because the rate is based on volume – not price,” Magnarelli explained. “I strongly support capping the state’s tax on gasoline, which could save New York motorists $400 million, and urge the governor to work with the Assembly to swiftly enact this proposal.”

Price Gouging

With no immediate relief or long-term solution from the Bush administration expected, the Assembly has proposed measures to create greater scrutiny of oil companies and retailers.

“As Big Oil continues to reap huge profits, the president only gives lip service to the real impact this is having on ordinary Americans,” Magnarelli said. “Although there are limited steps we can take here in New York, the Assembly is committed to bringing relief to consumers and putting additional pressure on gasoline companies and retailers to hold down prices.”

To better protect consumers, Magnarelli said the Assembly’s plan would make it easier for the state Attorney General to go after price gougers by strengthening the current price-gouging statute. The bill would empower the Attorney General to prosecute businesses – in-state or out-of-state – that charge excessive prices during natural disasters or abnormal market disruptions.

Under the measure, a case of price gouging may be established if, following the onset of abnormal market conditions, the merchant increases the price of goods or services by more than 25 percent or increases the mark-up on such goods or services by more than 25 percent over the price in markup in place immediately before the disruption. For motor fuel, however, a case may be established if the price increase or markup is more than 10 percent.

Greater Accountability

The Assembly has also requested that the New York State Department of Finance and Taxation commissioner review the tax returns of the nation’s largest oil companies to ensure they are paying the full amount on their record profits. The commissioner would also be required to report back to the Legislature about the amount of taxes paid by oil companies, the use of tax expenditures, as well as evaluate whether requiring oil companies to file on a combined basis would reflect their New York income more accurately.

Availability of Alternatives

To ensure consumers receive the gasoline tax savings, the Assembly proposes requiring the state Tax Department to monitor oil companies. The Assembly would also establish a 25 percent windfall profit tax on oil companies, proceeds of which would help fund research on alternative energy sources.

Recognizing the importance of increased alternative fuels use as a part of an effective energy strategy for the future, the Assembly’s legislation includes a plan to increase the distribution of feasible alternatives to gasoline. Under the bill, the state Thruway Authority would be required to make each recommended alternative fuel available to the public at least every 120 miles on both sides of the Thruway. Under the proposal, the New York State Energy Research and Development Authority would assist the Thruway Authority in selecting appropriate alternative fuels, which could include ethanol, methanol, natural gas, propane, electricity (including electricity from solar energy), and hydrogen.

“There needs to be a national energy plan in place that helps protect our wallets, while working to find alternative sources of energy,” stated Magnarelli. “Our dependence on oil can be broken, but it takes a long-range plan to do so. Our current President has shown no interest in thinking that far ahead.”

Biofuels

“That plan needs to address the need of breaking our dependence on oil, by starting to work on alternative forms of energy. Not only do we need to find ways of getting the alternative sources of energy to the people of New York, we need to work on ways of producing alternative energies,” Magnarelli said. “I have been working to help bring Northeast Biofuels to Central New York. By turning the former Miller Brewery plant into an ethanol production plant, we can start focusing on the use of renewable energy sources.”

This will be one of the largest ethanol facilities in the nation. By building partnerships with businesses and farmers this new plant could be producing corn-based ethanol by 2008 and Cellulosic ethanol in only a few more years.

The new biofuels plant and the steps being taken at Syracuse Center for Excellence regarding alternative energies are putting New York at the forefront of advancing the renewable energies and the biofuels industry in the nation. Not only will these efforts help provide a renewable, alternative energy source, but will bring in new jobs, new businesses and a glimpse of the future to Central New York

“Unfortunately, the current administration in Washington is not looking out for the working families of New York, so we must do all we can in Albany to provide some relief at the pump,” Magnarelli said. “I am fighting to do all I can at the State level to work in a bi-partisan fashion to find a solution and deliver relief today. It is time to end all the rhetoric and political grandstanding and time to start working for a solution.