A few weeks back I wrote in this space about New York’s gasoline tax; predicting lawmakers from various corners would be calling for its temporary roll-back as a means to relieve the price at the pump. If I remember correctly, I confidently wrote that it couldn’t be done – that lifting the sales tax on anything, however temporarily, is too complicated, too much of a political and logistical lift.
I also picked Iowa and Gonzaga for the March Madness championship, so there you go.
Albany indeed made a liar out of me last weekend with a budget that includes suspending a part of the state’s gasoline tax from June 1 – December 31, reducing the pump price by roughly 16 cents per gallon. This is nice, coming as it does just as the summer driving season gets underway. Every little bit helps.
Hang on a second … June 1 … that date rings a bell … it’s the start of the second quarter of the state’s fiscal year so that makes it a good date to change tax policy, however temporarily. But miracle of miracles, it’s two days before the scheduled end of the state Legislature’s regular 2022 session; a passel of incumbents in every part of the state (including Governor Hochul) face primary election challenges on June 28 and legislative leaders are sending their troops home for some full-scale campaigning between June 3 and June 28. What better gift to send them home with than a gasoline tax break. They’ll all be able to tell us how hard they fought for “middle-class New Yorkers struggling to choose between buying a gallon of gas and buying food to put on the table.”
Friends in the Capitol tell me the gas tax was one of the big sticking points in the budget talks. My guess is the sticking point wasn’t necessarily an opposition to the concept but more a deep dive into figuring out its logistics, more political than practical. On the practical side, they had to figure out how to siphon the tax out of the pump without decimating the revenue dedicated by law to the downstate Metropolitan Transit Authority.
Surely they talked, too, about whether to force counties to give up their share of the sales tax. Albany has been loath to do that ever since those old “week without sales tax” deals where the state would drop its four percent sales tax on clothes and shoes, then give counties the chance to opt in. Few did. None could afford it. Otsego and every other county in the state have two fundamental sources of revenue: sales tax and property tax.
Announcing the budget deal, Governor Hochul called on county governments to consider following the state’s really-not-all-that-brave lead on the gas tax. She knows they can’t. Everyone in that Capitol knows counties can’t afford it. Some might try, just to be in the “look we did it, too” camp, but for the most part, it’s a cynical non-starter. But at least state officials up for election can say they did their part.
Carrying the tax break through December 31 is doubly convenient, too – December 31 marks the end of the state’s third fiscal quarter, but it also comes after November’s general election.
I have to give them credit – spanning the temporary tax break across two sure-to-be-sticky elections is pretty genius political stuff. Imagine the calamity had New York re-imposed its gasoline tax on September 1 – the start of the state’s second fiscal quarter and, for the most part, the end of summer driving. The price at the pump would’ve jumped 16 cents-per-gallon on the eve of the real campaign season and voters would have rebelled.
As it is, this state-sales-tax-only tax break will go the way of the state-sales-tax-only tax break we “enjoy” on clothes and shoes costing up to $110 per item (there’s a reason for that, too, and it’s ridiculous, but there’s not enough column space to explain it) – a shoulder-shrugging photo op that delivers far less benefit than its attendant press releases would try to lead one to believe.