State balks on gas tax cut - East Valley Tribune: News

State balks on gas tax cut

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Posted: Thursday, September 8, 2005 11:10 am | Updated: 7:53 am, Fri Oct 7, 2011.

In Georgia, the governor suspended state gasoline taxes, and the price for a gallon of gas quickly dropped by as much as 35 cents. In Arizona, lawmakers are talking about waiving — at least temporarily — similar state taxes that add 18 cents to every gallon.

But talking is all they are doing right now.

In the East Valley, gas prices Wednesday were $3.12 a gallon, according to AAA Arizona. The state average was $3.13.

Gov. Janet Napolitano has sidestepped questions in recent days about suspending the tax. And the Senate Transportation Committee held an "emergency" hearing Wednesday to discuss the tax but took no action after senators and oil industry lobbyists raised questions.

Napolitano and state Attorney General Terry Goddard did say late Wednesday they were launching an antitrust investigation into the dramatic jump in pump prices in the aftermath of Hurricane Katrina.

"Arizona’s skyrocketing gas prices are not only painful at the pump but highly suspicious," Goddard said in a statement. "Whenever our prices exceed California’s, the source of most of the state’s supply, alarm bells sound. We want to know what accounts for it."

On Friday, Georgia Gov. Sonny Perdue signed an executive order that stopped gas tax collections in his state until Sept. 30, and he called the Georgia Legislature into special session this week to formally endorse his plan.

The result: Average prices for regular unleaded dropped in Georgia from $3.19 per gallon Friday to as low as $2.85 by Tuesday morning, according to the Atlanta Journal-Constitution.

But Arizona officials said Wednesday they aren’t convinced the same thing would happen here.

"There is a will to do something, but there’s a cautionary note not to do something that just makes the situation worse," said state Sen. Thayer Verschoor, R-Gilbert and chairman of the Senate Transportation Committee. "I really want some answers. I don’t just want to jump into something."

Officials in Arizona and several other states have been looking at giving some temporary relief to motorists as gasoline prices shoot up beyond $3 per gallon. Napolitano likely can’t act on her own and would have to call the Arizona Legislature into special session first.

That’s not likely to happen soon.

"The governor is looking for real answers that would have a real impact for consumers," said Pati Urias, a Napolitano spokeswoman. "No one seems to know how gas prices work."

Verschoor called a transportation committee hearing Wednesday in an attempt to build support for suspending the state tax. Instead, he heard questions from other senators and oil industry lobbyists about whether gas retailers actually would lower their prices.

"Costs fluctuate every day, almost every hour," said Anita Mangels, a consultant with the Western States Petroleum Association. "You would have to assume that every other relevant factor . . . would remain the same to know how much prices would fall."

Motor fuels taxes bring in about $2 million a day, which must be used for road construction and street maintenance. The state has a $320 million budget surplus in its General Fund, so Verschoor and other supporters believe Arizona could afford a suspension of the gas taxes for up to six weeks.

But officials for the Arizona Department of Transportation testified Wednesday that any delay or diversion could hurt independent ratings on the state’s highway construction bonds. That would mean higher interest rates for those bonds, which could just shift the cost to taxpayers from one pocket to another instead of providing them any relief, state officials said.

"I know we’re all getting these telephone calls and I understand the public would like something done," said Sen. Carolyn Allen, R-Scottsdale. "But I personally would like things to settle down before we . . . start monkeying around with something that we don’t understand the long-range consequences."

Rep. John Shadegg, R-Ariz., has introduced legislation to temporarily suspend federal gas taxes of 18.4 cents a gallon for 30 days. Shadegg said he’s hoping Congress will act within the next two weeks, and he’s convinced public pressure would force gas retailers to give motorists some relief.

"I don’t believe any station can genuinely get away with not lowering their prices by at least 18.4 cents once the tax goes away," Shadegg said.

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