In-depth: Assessing future of gas tax holiday at county, state level

Could an extension of both suspensions be coming for residents of Erie County?
Gas pump
Photo credit Brandon Bell - Getty Images

Buffalo, N.Y. (WBEN) - Since June 1, drivers across Erie County have been able to enjoy a pair of gas tax holidays, allowing residents to save some extra money at the pumps. This came at a time when gas prices were soaring near $5 per-gallon.

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It was back in late April when Erie County Executive Mark Poloncarz presented a resolution to temporarily cap the county's sales tax on gas at $2 per-gallon. Erie County Legislators voted unanimously in favor of the motion, that gave drivers a savings around 11 cents per-gallon, based on gas prices at the time.

Then during the announcement of New York State's massive $220 billion state budget in April, state officials agreed to suspend a portion of the state tax on gas starting June 1. That would allow New York drivers to save roughly 16 cents per-gallon of gas.

While gas prices have continued to fluctuate over the last six months, the estimated $27 cents per-gallon break in Erie County have been able to help drivers who are also burdened with the rising prices of other essentials.

However, both gas tax holidays are set to expire in the coming weeks, with the state suspension set to end on Jan. 1, 2023, and the county gas tax break ending on March 1, 2023. While gas prices currently sit at an average of $3.69 per-gallon in Erie County, according to AAA, once the gas tax suspensions expire, that will likely see prices at the pump rise again.

But could we see an extension of either gas tax holiday before they're set to expire?

State gas tax holiday:

While the gas tax holiday saved New Yorkers an estimated 16 cents per-gallon, political analyst Jack O'Donnell believes the break may not have been as effective as first intended.

"I think that we've seen some reports that not all of the savings have been passed on to taxpayers. There's been a small benefit, and I think every driver will agree every little bit helps, but I think everybody's still feeling the heat."

According to O'Donnell, he says about half of the savings have been passed on directly to consumers, but the other half could not be passed along because other costs and some of the stuff that the facilities themselves are dealing with.

Given the six months of the state gas tax holiday, O'Donnell believes there won't be any extension forthcoming beyond the deadline of Dec. 31.

"I don't think that it can be extended at the end of this month," he said. "The Legislature isn't in session, and it was only a limited relief that was in the state budget when it was passed in April. I know we've heard from a number of legislators calling on the Governor to do that, but I'm not sure it's going."

Even if an extension of the gas tax holiday is decided upon to help the residents of New York State, O'Donnell says there likely wouldn't be much of a chance for a permanent extension of the suspension.

"We have heard from a number of legislators, specifically the Republicans in the State Senate, pushing this, but I'll tell you, one of the reasons that I don't expect it to become permanent is that there are costs to that, and to the state as well," O'Donnell said. "Some of the money from the gas tax goes straight into transportation funding, and so the state used some general fund revenues, some of the federal monies that had come in as the state was flush last year to make sure that that money was still going into the road funds. That would take another infusion of cash, either from the federal government or from the general fund, and that's tough to do. That's a lot of money that we're talking about, I think it was a couple-hundred million dollars as part of the budget process.

"Without that funding, our roads and bridges, which are also suffering, that work doesn't get done either. So that's why I think it's a lot more complicated than just saying, 'Keep some dollars.'"

County gas tax holiday:

At the county level, Erie County Legislators feels the gas tax holiday has had a positive effect for drivers across the region.

"I haven't seen gas prices go way down, and I think people are definitely paying less. Whether they realize it or not, they are paying less," said Legislator Jeanne Vinal on the matter. "It is less money that will go to the road fund, however, in a time like right now when people really don't have an option yet - electric cars are so expensive, there's not really public transportation to every employer and other places people need to go - a car is a necessity for a lot of people. So therefore, anything we could do to save money on necessities, I think it's important."

"I think anytime that we can help regular, ordinary people pay less for their staples, it's an important thing that we should be looking to do," added Legislature Minority Leader Joe Lorigo. "I know when we put the gas tax cap in, it was only until the end of February, and the minority caucus had said, and I believe they should continue, that they're going to push to make that a permanent tax cap. I hope that happens."

While Lorigo will only serve as the Legislature Minority Leaders until the end of the month, he says he would love to see a permanent implementation of the county gas tax holiday before he leaves. He says it may be a resolution he may look to put in for the last legislative session of 2022.

"People are hurting right now. The cost of everything is through the roof, inflation is high, gas is high, groceries are high. And people really see that reflected when they go and fill up their gas tanks," Lorigo said.

If the Legislature does decide to vote to make a gas tax holiday permanent for all residents going forward, Lorigo believes it would have a positive effect for everyone.

"I think our Erie County budget, our sales tax numbers actually went up when we instituted the tax cap, because that money is going back into the community and back into our business organizations. It's not being squirreled away in people's 401K's, they're putting it back into buying meals or buying groceries or things like that," Lorigo said. "It's really helping out the economy, because they have a little bit more money to put back in."

In the meantime, an extension of the gas tax holiday currently in place will certainly be looked into, according to both Lorigo and Vinal. Vinal believes there are two reasons why right now is a great time to extend the suspension currently in place.

"On the unfortunate side, because of inflation, it's a great time to give people a break. And on the other hand, because of the federal stimulus, if there's one time where we could delay getting money for highways and big projects, it's now because of huge stimulus monies that have come through because of the pandemic," Vinal explained. "Right now, it won't be felt as much by governments on the road upkeep. So right now, I think is the perfect time to extend that."

Featured Image Photo Credit: Brandon Bell - Getty Images