TALLAHASSEE, Fla. -- In an effort to ease pain at the gas pump, Florida Governor Charlie Crist suggested that lawmakers enact a gasoline tax holiday this summer, temporarily suspending the tax levied on every gallon of fuel, said a WOKV-TV report.
"I know the frustration of people paying for gas at the pump," Crist told reporters shortly after proposing the plan on a Spanish-language radio station. "It's outrageous how expensive this is. Our dependence on foreign oil is ridiculous and I think if there's anyway we can relieve some of that economic pressure for our fellow Floridians we need [image-nocss] to do it."
Republican senator and presidential contender John McCain offered a similar plan this week, proposing federal gas taxes be halted from Memorial Day to Labor Day. (Click here to view CSP Daily News coverage of McCain's plan.)
Crist's plan is not that detailed, and probably wouldn't last that long, said the report.
"I think reducing gas prices is a good thing and if can do it then certainly should," Crist said. But when pressed for details, he admitted this is a work in progress. "I think doing the summer would be great and I don't know how much yet, we'll have to look at the numbers."
In 2004, state lawmakers lowered gasoline prices eight cents a gallon, saving drivers about $2 per tank, WOKV said. The state lost about $60 million, prompting many to call the idea a failure, the report added.
The state's current gasoline tax is 15.6 cents per gallon. The federal gasoline tax is currently 18.4 cents.
Florida has tried cutting its gasoline tax before, added a report by Conde Naste Portfolio magazine. The state passed a similar cut in 2004, when lawmakers said people needed relief when gasoline was about $2 per gallon. Lawmakers cut the then-14.3 cent per gallon tax by 8 cents for a month, a move that cost the state an estimated $60 million.
Cutting the gasoline tax, however, could be difficult as lawmakers are already making about $5 billion in cuts to the state's approximately $70 billion budget, the report said.
Asked if the state could afford losing tens of millions of dollars to give people a tax break that amounts to a few dollars per driver, Crist said, "Sure we can. And families need the help, more importantly."
House Speaker Marco Rubio (R) was cautious about the idea, which would need the approval of the legislature, saying there were problems the last time the state temporarily cut the gas tax. People bought less gasoline just before the tax break kicked in, then hoarded it just before it ended, he said.
"I'm not against the idea, but there have been some pitfalls in the past when we've tried to do it that have raised caution flags," Rubio told the publication.
He also said there is a concern on whether the full tax savings would be passed on to consumers, though a AAA report after the 2004 cut found that the savings were, in fact, passed on. Pat Moricca, president of the Gasoline Retailers Association of Florida, told Conde Naste that nearly all retailers would give any cut to consumers. "The ones who do not pass it are going to sell less gasoline," he said. "People will go to the station that's the lowest."
Meanwhile, the Association of Equipment Manufacturers (AEM) calls McCain's "gas tax holiday" an unproductive idea. AEM president Dennis Slater said in a statement that eliminating the federal gasoline tax would further delay badly needed road and bridge repairs and improvements. An estimated $9 billion dollars would be lost ($7 billion for highway improvements and $2 billion for transit).
Removing the federal user fee, even temporarily, will have a ripple effect on state and local governments, as they match federal spending to make local surface transportation improvements. The proposal would also have a ripple effect on employment. It is estimated that more than 310,000 American jobs related to federal highway/transit investments would be at risk. Federal user fees have not been raised since 1993, and therefore have not been a factor in the increase in fuel prices. If the "gas tax holiday" was enacted, drivers would spend even more of their summer holiday stuck in congested traffic.
Also, Janet Napolitano, governor of McCain's home state of Arizona, said his gas tax holiday is a "pander" that will not solve Americans' fiscal distress and will only drive the federal government deeper into debt, according to The Arizona Republic.
"As far as I can see, his plan would only have us digging deeper and deeper and deeper," she said. "I understand that this [high gas prices] is money out of people's pockets. The question is how do you do it in a smart way."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.