Faso, Weld Seek To Cut Taxation On Gas at Pump

ALBANY - As New Yorkers sit in traffic and fume about burning through tanks of $3-a-gallon gasoline, the Republican candidates for governor say they want to suspend the state sales tax at the pump.

A former minority leader of the Assembly, John Faso, said yesterday that he wants to eliminate the 4% sales tax on fuel purchases between Memorial Day and Labor Day, when demand is typically at a peak. His Republican rival, William Weld, supports eliminating the tax indefinitely.

While the Republicans running neck-and-neck in opinion polls offered relief from surging gas prices, the Democrats running for governor avoided dipping their toes into the slick waters.

Spokesmen for the leading candidate, Attorney General Eliot Spitzer, did not return calls for comment. A spokeswoman for the other Democratic candidate, Thomas Suozzi, said she could not reach the Nassau County executive to determine his position on the gas tax.

New Yorkers pay the highest gas taxes in the nation - 45.8 cents a gallon in state and local taxes - and rising gas prices have increased the burden, which has put pressure on state and local politicians to do something about it.

By comparison, New Jersey motorists pay an average tax of 14.5 cents a gallon, and Pennsylvania drivers pay 32.3 cents, according to the American Petroleum Institute, which represents the oil industry. Along with the state sales tax, New Yorkers on average pay an additional 4% on local gas sales taxes. When gas cost $1 a gallon, New Yorkers were paying eight cents in sales taxes. Now, they are paying 24 cents. New York collected $411 million in gas sales tax revenue in fiscal year 2005-06. The previous year it collected $356 million.

The other gas taxes in the state - the largest being an eight cents a gallon excise tax and a 15.9 cents petroleum business tax -have largely remained constant during Governor Pataki's three terms in office.

Under Mr. Faso's plan, counties could opt out of the tax suspension. Revenue from the state's sales tax goes in the general fund. Mr. Faso said the state could pay for the cut through expected revenue growth.

With gas well into the $3 range throughout New York, the price is dropping in some oil-producing countries that are benefiting from record oil prices. In Saudi Arabia, King Abdullah bin Abdul Aziz yesterday ordered that domestic gas prices be lowered by 25%.

While the Republican gubernatorial candidates and Republican lawmakers have various plans for lowering gas taxes, the state's two most prominent Republicans aren't on board. Last week, Mr. Pataki said he was not considering suspending the state sales tax and May or Bloomberg waved off the idea of suspending the city sales tales, saying the city cannot afford to lose the revenue while its own gas prices go up.

The Republican-controlled state Senate wants to cap the combined state and local sales tax at about 16 cents a gallon. Assembly Democrats are opposed to such a cut, arguing that reducing the sales tax won't necessarily lead to lower prices.

Fiscal observers said they saw in the proposals by Messrs. Faso and Weld further efforts to set themselves apart on fiscal policy from Mr. Spitzer, who has said little about how he would seek to alter specific taxes. His primary campaign themes have been about increasing transparency and accountability in Albany. One conservative analyst, E.J. McMahon, director of the Empire Center for New York State Policy in Albany, said the Republican candidates appeared to be taking a populist approach to tax-cutting.

Mr. Weld several weeks ago surprised budget watchdog groups when he proposed eliminating the state income tax for people making $75,000 or less. Mr. Faso said he would give New Yorkers a break on their school property taxes by using state funds to increase their exemptions. Both plans received a frosty reaction from liberal and conservative watchdog groups.

Mr. McMahon said he doubted motorists would save as much as Mr. Faso said they would. The tax cut would prompt New Yorkers to buy more gas, Mr. McMahon said, driving prices back up. Prices at stations located in state border areas would stay lower for longer, he said.

Mr. Faso said he disagreed with Mr. McMahon's analysis. "The price of the commodity is dictated by the marketplace," he said.