Hardy Plumbing
May 24, 2006

Dems Disdain Gasoline "Chicken Soup"

Ed Romaine ain't outta gas yet. In the wake of the failure of his proposal seeking authority from the state to regulate the county's portion of sales tax on gasoline, and with the news that the governor signed a bill capping state gasoline sales tax, the North Fork Legislator vowed this week to continue to seek relief at the pumps. Signed by Governor George Pataki over the weekend, the state bill freezes the tax at the $2 per gallon rate.

According to Assemblyman Fred Thiele, one of the earliest proponents of gasoline sales tax relief, if the counties across the state sign on, the combination of capping of state and county sales tax could result in a savings of $450 million for motorists in the state of New York. Locally, drivers would save about a dime a gallon at current prices.

The state bill allows counties to opt in, and Romaine has already asked the legislature's legal eagles to draft a resolution seeking to take up the offer.

Not that it has a lot of chance of passing, he acknowledged. The Democratic majority's refusal to adopt his earlier measure could be seen as a harbinger of another failure to provide tax relief for motorists, he allowed following last week's legislative session in Riverhead.

As previously reported, Romaine's bill, co-sponsored by the South Fork's Legislator Jay Schneiderman, merely sought the authority to regulate the county's portion of sales tax on gasoline. The state currently lays claim to the power. Had it been approved, lawmakers could have then decided what percentage, if any, of the sales tax to repeal.

However, faced with revenue shortfalls that measure in the tens of millions, Democrats balked at letting go of the cash cow gasoline sales tax has become. Romaine has repeatedly derided the concept of government benefiting from the hardships of its citizens.

In 2004 when gas averaged $1.95 per gallon, Suffolk collected $48.1 million in gasoline sales tax revenue. Last year, as prices began to burgeon, the county collected $57.2 million. This year's budget anticipates revenues of $ 64.1 million, if gas costs $2.52 per gallon. By the latest reports, however, the average price for regular gas has rocketed past the anticipated cost to $3.13 across the state, with prices on Long Island and the East End traditionally running even higher.

Debating Romaine's bill in session last week, Legislator Ellie Mystal (D. Amityville) said simply, "It's too iffy." Caucus colleagues were skeptical that the savings would actually reach consumers if the sales tax were reduced. Democratic caucus leader Jon Cooper of Lloyd Harbor said he'd be "astonished" if motorists actually saw a savings. He predicted oil companies would use a sales tax savings to increase already record profits.

"Until you convince me the money will end up in the pocket of the consumer I won't vote for a rollback," Legislator Lou D' Amaro (D. Deer Park) said.

"If you're going to make that argument, you wouldn't reduce the sales tax on anything," Schneiderman countered.

Last year, both Mystal and Cooper were among lawmakers who voted to reduce the sales tax Suffolk collects on home energy sources such as fuel oil.

Speaking to The Independent, Legislator Cameron Alden (R. Islip) rebuked the Democrats' argument as "bogus." During session he noted that the state bill provides hefty fines for entrepreneurs who fail to pass the savings on. Additionally, he noted that Democratic Attorney General Eliot Spitzer, who is running for governor, has evinced a passion for pursuing gas gougers.

A News12 poll following the session later last week showed overwhelming support for a sales tax repeal. One Dem reacted to the negative press, disparaging the savings as adding up to only about $25 over the course of the summer. Alden noted that the home energy sales tax repeal, which garnered almost unanimous support, anticipated a similarly modest savings for homeowners. Romaine said of the idea "It's like chicken soup, it can't hurt."

After lengthy debate, lawmakers addressed what some saw as the main reason for opposition — the hole the loss of revenue would blow in the county budget. If the tax were capped at $2 per gallon, the county would collect between $16 and $22 million less revenue than it has planned for in the 2006 budget.

So far, County Executive Steve Levy has refrained from expressing outright opposition to the notion of offering gasoline sales tax relief. Rather, he's asked proponents to explain how they'd offset the revenue loss.

Apprised of the county's majority stance on the tax rollback, Thiele said, "We heard the same excuses in Albany, but finally convinced them." Ultimately public pressure became so great, state Democrats signed on in support of the tax freeze, he related.

Also last week, the majority squashed a Romaine proposal geared toward offering low-income homeowners a $100 incentive for replacing outdoor fuel tanks. "It's not a lot of money, but would be a great benefit," the legislator told colleagues. Enough of them disagreed to nix the proposal. Last year Suffolk County adopted incentives for homeowners who remove underground fuel tanks. Presiding Officer Bill Lindsay (D. Holbrook) noted a "big difference" between that program and Romaine's proposal. A homeowner can't tell if a buried tank is leaking and they cost much more to replace.

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