BUFFALO, N.Y. (WBEN) A gas tax holiday is coming in New York State.
The amount of savings may vary depending on the county that you fill up in, starting June 1st.
Many counties are still deciding whether to cap sales tax on gasoline at either $4, $3 or $2 per gallon. The relief would be on top of the 16 cents per gallon the state will provide from June 1 to December 31.
In Erie County, Comptroller Kevin Hardwick said the proposal that the Erie County Legislature will take up on Thursday, would cap the sales tax on gas at $2 per gallon from June 1st through February 28, 2023.
"That means that you would pay the 8.75% sales tax on the first two gallons
that you purchase. After two gallons, the gas would be tax free," said Hardwick.
The savings is estimated to be around eleven cents according to Erie County
Executive Mark Poloncarz, based on current gas prices.
"Will we see that at the pump, as a reduction in the price?" asked Hardwick rhetorically. His answer, "probably not."
"The price of gas is inelastic, or changeable. If you change it by a few pennies, people won't change behavior." As a result, Hardwick predicts the oil companies are going to pocket some of this.
"I think there's going to be a mini windfall here for the oil companies," he said. "We won't see the price of gas reduced 11 cents at the pump" (on top of the 16 cents the state is suspending).
Hardwick said ultimately, the county is left with the situation where it's losing the revenue that has to be made up elsewhere. "For every dollar that we do not collect in sales tax, we have to make up for in property tax. We take it from one pocket and put it in another," he added.
He said we're talking about millions of dollars in lost revenue for the county.
"There is an estimate out there that it would cost the county about $800,000 a month. Additionally, it would cost school districts and towns and villages, who we share the gas tax with, about $600,000 a month."
Hardwick's other concern is that Erie County will be losing revenue from people who live outside of Erie County and stop to fill up their cars here.
Erie County, as well as other municipal governments, are flush with cash due to federal CARES Act and American Rescue Plan funding following the pandemic. And while new sources of funding are coming in, from the casinos, and opioid settlement, for example, there are big projects on the board including a new Bills stadium.
Niagara County this week unanimously voted, 10-0, to cap the sales tax on gas at $3 per gallon.
"I think what Niagara County did was perhaps more prudent that what we're planning to do here," added Hardwick.