Over the summer, New York Governor Kathy Hochul and state lawmakers agreed to a suspension of New York State’s gas tax amid the rapidly increasing prices. This holiday saved residents about 17 cents per gallon at the time. However, with gas prices seemingly on the rise again over the last couple of weeks, lawmakers are calling to extend the suspension past the original December 31st deadline.
How Far Do Lawmakers Want to Go?
“These are tough times, challenging times, and I’ve talked about doing things that put money back in people’s pockets,” said State Assemblyman Angelo Santabarbara. December 31st is the set date for the gas tax deadline to end. However, this week lawmaker Santabarbara began a push for further relief as he believes this holiday should be extended into 2023. Reports show that the average gallon of gas in New York State is $3.90, a number that has been steadily rising throughout the fall season.
“The economy is kick-starting, getting back up and running,” Santabara said. “The last thing we want to do now is make it unaffordable. It may seem like a small amount, but like I said, it adds up.”
Paying for the extension
With any suspension of a tax, it of course would need to be paid for somehow. Gas tax revenue goes to support mass transit systems throughout the state. Around $974 million in revenue is put towards the Dedicated Highway and Bridge Trust Fund for improvement and maintenance projects.
All told, New Yorkers pay about 33 cents per gallon in taxes through a variety of levies. At the same time, local sales taxes of either 7% or 8% affect the final price at the pump. Multiple county governments in New York also moved to suspend or limit their sales taxes in conjunction with New York’s gas tax action this year.
“Gov. Hochul is deeply committed to helping keep money in New Yorkers’ pockets as they continue to face rising costs and inflation during a national affordability crisis,” said spokesman Justin Henry. “The governor worked closely with the legislature to provide more than $600 million in tax relief to New Yorkers by instituting a six-month gas tax holiday – which is already among the longest in the nation – and will continue to explore solutions to help New Yorkers meet the rising cost of living.”
Wrap Up
Amid the rising prices over the last few weeks, it would be a welcome idea to extend the gas holiday past the initial deadline. Connecticut has already signaled its plans to extend its gas tax holiday, so hopefully, that pushes NY to do the same. We will be keeping an eye on the situation as it unfolds.