Guv puts brakes on gas-tax holiday

Published May 23, 2008 1:13 am
Says Utahn's should be outraged at prices but the state can do little
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Gov. Jon Huntsman Jr. said Utah's gasoline prices are outrageous, but suspending the state's gas tax is a bad idea and there is little the state can do to ease consumers' pain.

"Every citizen of the state ought to be outraged by gas prices," Huntsman said. "It is an outrage. I don't know any other way to say it. But what to do?"

In Utah, gas is selling for an average of $3.68 per gallon, according to AAA and the Oil Price Information Service, still below the national average, but 48 cents a gallon higher than last year. And economists are projecting higher prices by the end of the summer.

Karen Gill, who was filling her car Thursday at the Mowhawk Food Mart in Salt Lake City, said the cost of gas has been frustrating to her, but "I guess that I have to deal with it. I have to pay for it because I have to go places." Still, a tax break would be helpful, she said.

"For sure. That would help out a lot. Every penny counts nowadays," she said.

But Huntsman said he would not consider a short-term repeal of the state's 24.5 cents per gallon gas tax because he doesn't think it would help consumers and would leave the state in a bind.

"I don't think it would be a good policy tool here locally and I say that because the federal government can absorb it a lot more easily than we can here locally," Huntsman said, speaking during his monthly KUED news conference.

He said there are no guarantees consumers would see the benefit of the tax reprieve, and it would hamstring road projects funded by the gas tax.

"When you quantify that 23, 24 cents, what does it mean on the other end in terms of projects that don't get done, potholes that don't get filled," he said. "I would not choose to pursue that as a policy tool."

At the national level, presidential candidates Hillary Clinton and John McCain - whom Huntsman has long supported - are pushing legislation in the Senate for a summer break from the federal gas tax, which is 18.4 cents per gallon.

Sen. Barack Obama opposes the proposal, calling it a gimmick and saying it would provide little assistance to consumers, and said he made a mistake supporting such a holiday when he was a senator in Illinois.

Several states around the country are also looking at ways to relieve the burden of high gas prices. Alaska is considering giving consumers a $100 gas card to subsidize the cost of fuel, which is over $4 per gallon. Various proposals for gas-tax relief are also being considered in New York, Missouri and Florida.

Stuart Adams, chairman of the Utah Transportation Commission, said the state is already struggling to keep up with the cost of maintaining roads, as gas-tax revenues have not kept pace with the increase in demands on the roads and as costs for asphalt used to repair roads - which is petroleum based - have also spiked.

The state is projected to receive $387 million in gas-tax revenues for the fiscal year ending June 30, up from $365 million last year, according to the Utah Tax Commission.

The commission hasn't taken a position on a fuel-tax holiday, but Adams said that he would be unlikely to support it. He said losing the funding would cut into road maintenance funds and roads that aren't maintained would have to be replaced, a much more costly proposition.

"It's a feel-good, sound-good idea and we all, I think, would enjoy it," he said. "But in reality, the price we would pay for it, the price the taxpayer would pay in the long run, would not be a good management idea."


* THE ASSOCIATED PRESS contributed to this story.

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