September 20, 2006

Good Car-ma: Levy Proposes Gas Rebate

It'll probably look like a Starbucks gift card, according to Ed Dumas, spokesman for County Executive Steve Levy. But, instead of enabling a user to partake of high-octane java libations, it will give county drivers savings on a different kind of fuel: gasoline.

Heralding a budget that calls for the third consecutive general fund tax cut last week, Levy and his press office revealed a second budget bonus — a gasoline rebate for owners of cars registered in Suffolk County.

Since gas prices spiked last spring county lawmakers have debated the notion of offering relief at the pumps to consumers. Local Legislators Ed Romaine and Jay Schneiderman sponsored a bill that mirrored a state measure freezing the amount of sales tax collected by the county at the $2 level. The county executive's democratic majority balked at the notion, citing the potential loss of millions in revenue, as well as expressing reservations that the savings would really be passed on to consumers. The bill stalled this summer.

In reaction the Dems proposed "real" tax relief in the form of several tax-free clothes shopping dates next year. Foes dissed the notion as bogus, since it would take an act of the state legislature to enact the special dates. Additionally, legislators railed against proposed offsets to the loss of revenue. A reduction of public safety moneys for the East End was of particular concern to local lawmakers and the county executive as well.

Speaking before the Riverhead Chamber of Commerce last Thursday, the county executive said the proposed rebate would be comparable to freezing the sales tax at the two dollar level for 18 months. According to Romaine's office, however, an analysis from the legislature's budget review office anticipated a savings of twice as much per year for the average driver.

The North Fork legislator also looked askance at the manner through which Levy hopes to fund the $16 million rebate program. The plan calls for using money from a LIPA lawsuit settlement, the sale of tax liens on Brownfield properties, as well as savings derived from "smart government initiatives" to cover the rebates without incurring additional costs.

"It's nice to see the county executive has finally realized the need for relief at the gas pumps," Romaine said, "but any money generated from a lawsuit on behalf of LIPA ratepayers should be returned to LIPA ratepayers." Lots of people who don't own cars do pay LIPA bills, the lawmaker pointed out. "Any money recovered from the LIPA lawsuit should be returned to the ratepayers and we should cap the sales tax on gasoline at two dollars to provide real relief to motorists," Romaine concluded. Schneiderman felt the same way. He, too, appreciates the desire to give relief to motorists, but questions giving money that should go to all ratepayers to only those who own cars.

So far, details of the plan have yet to be fleshed out. Levy plans to solicit proposals from credit card companies and financial institutions that might be interested in administering the rebate program. The companies would bear the responsibility of creating and mailing the cards. In return the credit card companies would collect a transaction fee from the gas stations.

Democrats on the legislature were effusive in their praise of the notion, according to a release from the executive branch. Presiding Officer Bill Lindsay (D. Holbrook) appeared pleased to note the tax relief issue was addressed within the context of the overall budget. Both Lindsay and majority caucus leader Jon Cooper (D., Lloyd Harbor) characterized the plan as "innovative."

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