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Some States Add To Pain At Pump

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The Associated Press

Published: June 9, 2008

ATLANTA - All of the talk among political candidates about a federal gas tax holiday to offset soaring prices at the pump misses a critical fact: state taxes are, for the most part, even more costly for drivers.

And in some states, including Florida, gas taxes are rising even higher, with a handful set to jump at the height of the summer driving season.

The average state sales tax on gasoline is 28.6 cents a gallon, according to the American Petroleum Institute. That's a dime more than the federal gasoline tax of 18.4 cents a gallon.

And while the federal rate hasn't increased since 1997, the amount drivers pay in state taxes can jump every year - or even every day - inching up as the price does.

Some legislators have talked about suspending the gas tax, but few proposals have gone anywhere.

Some warn that cutting the tax revenue - even temporarily - can deepen the woes.

"There's a need here and if we don't take care of it will only get worse," said Patrick Natale, executive director the American Society of Civil Engineers.

The roughly three dozen states that use a flat tax on gas may face declining revenue as motorists pinched by high fuel prices try to drive less.

In the dozen or so states where the tax is tied, at least in part, to the price at the pump, the skyrocketing of gas prices has meant an unexpected windfall.

California, which has the highest gas tax in the nation, according to a survey by the American Petroleum Institute, would rake in $5 billion this year if the price at the pump remains at $4 a gallon. That's more than double the $2.1 billion the state took in gasoline tax revenue in 2003, state revenue officials said.

Some states have considered rolling back their state gasoline tax.

So far, only Georgia has moved to provide relief.

Officials in Florida, New York and Missouri have proposed gas tax holidays but the idea has yet to gain traction, the National Conference of State Legislatures said.

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