The New York State Senate voted for a “gas tax holiday” yesterday, moving to eliminate the three state taxes on fuel for the busy Memorial Day, Independence Day and Labor Day weekends this year. The estimated loss of revenue would be $60 million.
The 48 state senators who voted for the gas tax holiday wanted to ensure that drivers didn’t have to pay for the environmental and social costs of their actions — a misguided enough goal — but their desperate attempt to pander wouldn’t even have been a success on those grounds.
As economists from across the political spectrum have stated, a summertime gas tax holiday wouldn’t reduce the price at the pump. Oil companies would charge the same rate and pocket the difference. The libertarian Cato Institute, no friend of taxes, called gas tax holidays a “holiday from reality” in 2008. If we really must pander to motorists, surely we can all agree that New Yorkers deserve better panderers.
Those state senators, however, are savvy politicos. They can’t deliver the goods, but they know their audience. That’s where the gas tax vote is especially revealing.
Even if a gas tax holiday worked as promised, reducing the price at the pump instead of increasing Exxon’s profit margins, it’s a sure thing where the money comes from: the state’s transportation budget. If the gas tax holiday costs $60 million, that’s $60 million in new revenues needed for the MTA and state DOT, or $60 million more in cuts to things like education. While only drivers would even theoretically benefit, everyone else would pay the price.
Voting for a gas tax holiday means you’re worried about appeasing drivers in your district and not too concerned with sending everybody else the bill. That’s probably good politics if you’re Patrick Gallivan, the Western New York senator whose district has a 96 percent car ownership rate according to Streetsblog’s analysis of Census data. More outrageous is the fact that many New York City senators seem to agree.