May 03, 2006
Cutting the gas tax

Like several other bloggers, I had the opportunity to speak to Rep. Trey Martinez-Fischer about his HB120, which is a proposal to suspend collection of the state gas tax for 90 days. There's a website up that explains the particulars and also offers a petition to sign if you support the idea - Governor Perry would have to add this to the call of the special session for it to be considered. Take a look and see what you think.

I'll be honest, when I first heard about this idea, I thought it was a gimmick, not unlike the US Senate's much-derided $100 bribe rebate that went over like a lead balloon. I've since changed my mind, and this is what convinced me.

We are fortunate because we can afford to give taxpayers a Gas Tax Holiday during the summer months. The estimated cost of HB 120 is 700 million dollars. That's less than 10% of our state's budget surplus. The last time I checked the surplus belonged to Texas taxpayers so it makes perfect sense to give it back in times of need.

Moreover, Texas will receive, over the next several years, an average of 788.1 million federal dollars pursuant to Equity Bonus Program, which Congress authorized under the Safe, Accountable, Flexible, Efficient Transportation Act (the Federal Highway Bill). I am told by a member of the Appropriations Committee that this money is un-appropriated and can be used to offset the lost tax revenue during the Gas Tax Holiday.

If there's a pot of unappropriated money that can pay for this, so that the existing budget is left intact and we're not essentially borrowing against future obligations to pay for an immediate need, then I can support it. (If it turns out TxDOT already has a purpose in mind for this pile, then we can reconsider as needed.) It's strictly a bit of short-term relief, but I think it will have a salutary effect, especially for people who drive their own vehicles as part of their jobs, like Rep. Martinez-Fischer's neighbor Willie the plumber. I've also heard anecdotal evidence that some charities, like Meals on Wheels, have been hard hit by the high gas prices. If this helps them keep getting the volunteers - and their cars - they need to do their good works, then so much the better.

In the meantime, as with the debate over HB3, it's always interesting to see Democrats pushing for a tax cut that Republicans are opposing. I can't swear that I've seen rivers running uphill lately, but I wouldn't doubt it if someone told me they were. Apparently, Dan Patrick is on board with this, which ought to kick the fun factor up another notch. We'll see what happens, but in the meantime check out the website and judge for yourself.

UPDATE: Vince, naturally, has the most comprehensive writeup of the conference call.

Posted by Charles Kuffner on May 03, 2006 to That's our Lege | TrackBack

Establishment Republicans in Texas these days are working very hard to live up to the Stupid Party label.

Why in the world they wouldn't just steal this idea and take credit for it is beyond me.

However, there is one decent objection -- and that is the effect on driver behavior. Why distort the price mechanism at this juncture (temporarily), when high prices discourage consumption and encourage greater efficiency/conservation?

Personally, I'm all for the tax cut, whether it's authored by Dems or Stupids, but the conservation issue is not irrelevant.

Posted by: Kevin Whited on May 3, 2006 8:53 AM

Have to agree with Kevin. The suspension might make sense if this was some kind of short term aberration, but it's not.
We should have been attacking this problem 10 years ago but we didn't and now the answer is to put off thinking about it for another 90 days? Stupid is much too kind a word.

Posted by: Mark on May 3, 2006 9:54 AM

While I see the benefit to those struggling to make ends me there is just something about this proposal I don't like. Maybe I'm looking on the other end of the econominc spectrum. I'm not for soaking the rich just for the sake of doing so but I'm a strong believer in logical and natural consquences.

If you're a single driver tooling around in a Hummer, Armada, Excursion, etc. I don't think it's too much to ask that you experience a little pain for that decision. It's not like the MPG wasn't listed prominently on the sticker when those road behemothes were sold.

Also I did see an interesting poll result this morning on CNBC. It seems that based on a hypothetical gas price of $3.25/gallon, ~40% of respondents think that ANWR should be opened to drilling. If the price of gas rises to $3.75, the support for drilling in ANWR rose to ~71%.

And when asked if $3.25 gas would impact driving habits only ~19% said yes. At $3.75 that rose to ~39%.

Posted by: Patrick on May 3, 2006 10:12 AM

As discussed above, the gas tax holiday is a bad idea. I am disgusted that Dems have joined in this pandering. Higher gas prices are here to say. Short-term giveaways aren't going to do us any good.

Besides, this is a total example of pre-9/11 thinking. We need to encourage more efficient use of oil in order to minimize our oil imports and our liabilities to unstable, undemocratic oil producing countries.

Posted by: Jeb on May 3, 2006 11:01 AM

While all of the comments are fair, I think this proposal does not fall prey to the "affecting driver behavior" trap. Here is why: It is so very limited just 90 days in a time of peak need. That is not a long standing shift in economic policy nor does it completely shift driver behavior. The very people who would be most helped by this bill, are the very people we as a party hope to fight for.

The very fact that it can only be paid for this year with the Bonus Equity monies, means that it cannot be extended; therefore, no long term impact to driver behavior.

All of the long term problems are grave indeed. But this proposal does not trade off with future considerations and it makes it more likely that people who can make this state a better place for the environment and using alternative fuels and are in power to make those decisions.

Posted by: Raskoklnikov on May 3, 2006 11:14 AM

Raskoklnikov, you raise some valid points to consider but may I summarize it this way? This is a temporary proposal that is not likely to affect driving patterns that will cost $700M in surplus revenue temprorarily lowering the cost of gas which is likely to remain high for the foreseeable future and we need to invest in alternative fuels.

Is that close?

Allow me to restate, we're throwing $700M dollars not to solve a problem but to make us feel better temporarily and to give the impression that we really care about voters who just so happen to be going to the polls this fall. Yippee!!!

I don't really mean to pick on you personally but this is yet another example of the band-aid philosophy to which politicians of all political stripes ascribe. "Let's push that problem down the road 3 months, 6 months, 10 years, etc." It is the expedient at the expense of the good. We consistently fail to elect leaders with every level. Hell, we consistently fail to even NOMINATE people with real vision. Instead we send forth "electable" warriors to do battle in a sound bite war.

And as voters we take the candy and side with the candidate that pushes the right hot topic buttons. Well, screw that. High gas prices are painful, but it is a pain we collectively richly deserve.

I personally think the $700M could be better used to endow research in alternative fuels at Texas colleges, expanding public transportation, convert state and local vehicle fleets to hybrids or those with engines using renewable fuels, heck, I'd rather give vouchers away for free tune ups than to give away $700M in an effort to make us feel better about driving MORE. Or am I just crazy?

One more thing, Raskoklnikov, it is not safe to assume as you have done that all here participating on Chuck's blog are of a single party. I don't think Kevin is a Democrat and I'm not either.

Sorry for the rant. Have a nice day.

Posted by: Patrick on May 3, 2006 2:20 PM

I think Kevin nailed it. As much as I don't like high gas prices and as much as I recognize its effect on typical we really want to encourage more consumption at a time when supply is constrained?

I very much want renewable alternatives pursued. Artificially lowering gas prices will discourage it.

In reality, what I think this nation needs is this generation's equivalent of the Manhattan Project or the Apollo Program to wean ourselves from Middle East oil. Such an endeavor would seek to wean us from energy dependence in countries who hate us and/or have unstable oil supplies.

This is a very real national security and sovereignty issue. If we didn't have to kiss the butt of oppressive, sometimes fanatical Islamic regimes to meet our energy needs, their leverage over us would be greatly reduced. We could tell Iran to pound sand and not worry about its impact on our economy as much as we do now.

The sad thing is, we've had almost 33 years of warning since the first oil shock to do something about it. And we failed.

Posted by: Tim on May 3, 2006 9:51 PM

If we didn't have to kiss the butt of oppressive, sometimes fanatical Islamic regimes to meet our energy needs, their leverage over us would be greatly reduced. We could tell Iran to pound sand and not worry about its impact on our economy as much as we do now.

Tim, let me take that one step further - not only would we greater independence, reduced demand would lower the price of oil and dry up the chief source of capital for Iran's weapons programs and Usama Bin Ladin's flight school scholarship fund...among other things.

Posted by: Patrick on May 4, 2006 12:17 PM

All taxes are evil. Infact, all governments are bad. Even a democracy. But like Winston Churchill said, " it may be bad, but until something better comes along, it's the best we got".

Why is everyone cutting down the Gas tax , but not the Oil companies. Someone name me what interstate/local highways / streets/ bridges ---Golden gate, Brooklyn bridge, and all the other massive bridges and structures on the highway that the big oil companies contributed to. Not a penny. I tell you what, we can plow up the highways and put in corn fields, and we would quickly get turned off to driving , and buying gas -----taxes and the high oil profits. For those against the taxes that build the roads----drive in the corn fields.


Posted by: Mike Mauney on May 9, 2006 12:23 PM