Senate Plan Would End Gas Tax Windfall

State Senator James L. Seward today called for a cap on the gasoline sales tax to provide immediate price relief to motorists, and proposed spending the state's accumulated gas tax "windfall" to help seniors stay warm this winter.

"The state reaps a windfall because gas taxes are tied to the price of gas. The windfall generated by soaring gas prices should go back to people where it will do the most good," said Seward. "The state should move quickly to cap gas prices and provide relief for motorists so that the state doesn’t profit on their hardship."

Seward proposed rolling back the gas tax and replacing it with a fixed state-local levy, providing motorists immediate savings up to eight to 10 cents per gallon on fuel purchased at more than $2 per gallon. Unlike the existing levy, the new gas tax would not rise as prices increase, thereby eliminating any future windfall to state and local governments.

Consumers can contact the state Consumer Protection Board, toll free, at 1-800-214-4372, to report suspected gas price gouging. Complainants will need to provide information such as the location and name of the company. Residents can also file a complaint on-line at http://energy.gov .

The senate legislation also creates a new "Senior Heat" program, which will provide direct, one-time, rebate checks of $100 or more to assist at least 640,000 New York seniors using eligibility guidelines of the Enhanced STAR property tax program in meeting their increased energy bills this winter. Enhanced STAR is available to seniors 65 years and older who earn under $65,000 per year.

The program is to be funded with revenues from the gas tax windfall, now projected at $42 million, but estimated to grow to $100 million or more by the end of the fiscal year.

"Many seniors are facing tough choices this winter between staying warm and meeting life’s other necessities," said Senator Seward. "The senate plan will help avert tragedy, and help hard-pressed seniors pay their heat bills, by directing the unanticipated windfall to those who need it most."

In addition to soaring gas prices, the price for natural gas and heating oil has risen dramatically since last winter. According to NYSERDA, the average fuel oil price rose from $1.76 per gallon one year ago to $2.43 per gallon last week -- a 38 percent increase. New York homeowners consume an average 800 gallons of fuel oil each winter. Natural gas costs are expected to show similar increases.

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