Gas-tax cuts to soothe consumers?

Several states are considering cutting gas taxes in an effort to combat rising prices.

Lawmakers from Hartford, Conn., to Oklahoma City are considering whether they should cut state gas taxes to give motorists relief.

The question is: Will it make any difference?

Even in the best of cases, consumers won't be running out to buy a new ermine fur with the savings. Indeed, Congress on Tuesday scuttled its plans for repealing a 4.3-cent gas tax, partly because legislators concluded that the lower tax might not help much at the pump.

Still, many elected officials, in a bid to appease voters angry about gas prices nudging $2 a gallon, are searching for a solution - and gas taxes are perhaps the quickest fix.

*In Illinois, the state Senate overwhelmingly passed a bill last week that might save drivers as much as 9 cents per gallon.

*In Connecticut, where the gas tax is one of the highest in the nation at 32 cents per gallon, Gov. John Rowland is pushing a 7-cent-per-gallon cut.

*Lawmakers in the New York state Assembly this week proposed waiving gas taxes for the summer, and a similar measure is being debated in Oklahoma.

Yet wresting such a highly cherished revenue source from legislators may not be so easy.

States add anywhere from a few cents to more than 30 cents to a gallon of gasoline, and in some places, there are also local levies. The total tax burden on a gallon of gas last year reached 40 percent in several states.

"Gas taxes have always been a largely hidden tax," says John Berthoud, president of the National Taxpayers Union. "When you go to the pump in most places, you have no idea how much tax is imbedded in the price you're paying. It's an ideal situation for politicians. They can take your money and nobody's the wiser."

But critics of cutting gas taxes say trimming the tax makes little economic sense. Saving a few cents on a gallon of gas that costs $1.50 or $2 is nearly insignificant, they say.

Moreover, gas taxes also pay for important road projects that ease congestion, they add. In fact, polls show many taxpayers prefer more and better highways - which are typically funded from levies on gasoline - to a tax cut.

To be sure, gas-tax cutters may have to settle merely for stopping planned increases in a number of states. In Kentucky last month, the governor withdrew a plan to raise the gas tax when confronted with heavy opposition, and a similar plan in Alaska has been shelved for the moment.

Increases are nevertheless possible. A May ballot initiative in Oregon would raise the gas tax by 5 cents. And in Massachusetts, cost overruns on Boston's mammoth "Big Dig" tunnel project have lawmakers eyeing a tax hike.

The rapidly rising prices at the pump, though, are forcing politicians to tread lightly - especially with a fall election looming.

In Illinois, where gas-tax-cut legislation passed the Senate 50 to 0, six other senators voted "present" to ensure they were not on record as opposing the bill.

"If you're running for reelection, and you've got opposition, I've got news for you," says Illinois Senate president James Philip of the bill. "You better vote for it."

(c) Copyright 2000. The Christian Science Publishing Society

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