County needs to keep the cap on gas tax

Saturday, November 24, 2007 11:54 PM EST

The Cayuga County Legislature this week is expected to vote on a measure that would end the sales tax cap in effect for gasoline purchases.
A number of lawmakers believe such a move is a prudent way to reduce the property tax levy, and they suspect the tax cap hasn't actually made a difference at the pump.

Such thinking is shortsighted.

The biggest flaw in this move is the idea of using increased sales tax revenues to reduce the property tax levy. Essentially, the plan would be to bank on gas prices remaining high enough throughout 2008 to make up for about 1 percent of the proposed levy.

This approach is dangerous because it sets future budgets up for shortfalls.

Yes, budgets must take projected sales tax revenues into account, but when you're balancing a budget on something as volatile as gasoline prices, you're taking a giant gamble.

Ultimately lawmakers should be looking harder at places to cut spending as a way to reduce the tax levy.

A few legislators are saying the gas tax cap should end because they've not seen lower prices at the pump. That's because the savings are largely incremental, and overall gas prices have much more to do with the global price of oil, not what Cayuga County is doing.

Right now this gas tax cap saves motorists about five cents per gallon. The amount of savings depends on how much one drives, of course, but over time it can amount to a decent amount of money.

And that's money kept in the pocket of a much larger group of residents - those who own automobiles vs. those who own properties.

The best move for this Legislature is to keep the gas tax cap in effect, and find other places in this spending plan where savings can be achieved.

True tax relief comes from cost cutting, not from shifting one tax to another.

The Citizens' Say

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There are 2 comment(s)

Sensible wrote on Nov 25, 2007 11:40 AM:

" The argument made by this author is flawed. While I agree that removing the cap for property tax purposes is shortsighted. I do not believe that removing the cap helps the public. In fact, experts believe that the price of fuel won't affect the American public to the extent that it did in the late 1970s until the cost of gas is near $6 per gallon. Therefore, don't just remove the cap, raise the tax and use the extra income to promote energy efficiency. The county could use the tax to make all county buildings energy efficient and reduce future reoccurring energy costs. If you have a 20 gallon tank, then removing the cap will only save one dollar! If people want to save money at the pump then get rid of the SUV. Conservation will save you more money than griping about 5 cents per gallon. "

hillbilly wrote on Nov 25, 2007 8:22 AM:

" I agree with the paper, if the Cayuga County Legislature does away with the sales tax cap for gasoline purchases, we will not only see our gas costs go up we will also see our property taxes go up too. Why? Because they are not talking about cutting costs. For my budget in my home I have to cut costs to pay for these taxes. I am sure there are many others in this same situation. So anyone who wishes to run for election I want to hear how you plan to cut costs and taxes. "

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