GAS TAX: If you’re not shell-shocked enough
paying more than $2 for a gallon of gas, consider this: The Erie
newspaper reports that the run-up in wholesale costs of petroleum
products that sent gas pump prices soaring for much of 2005 is due
to trigger an automatic increase in state gas taxes on Jan. 1.
[neWLine]
The state Revenue Department says the increase could be as much
as 1.2 cents a gallon on gas and 1.7 cents a gallon on diesel
fuel.[neWLine]
How did this happen? The state’s oil franchise tax is
pegged to the average wholesale price of oil for the 12 months that
end Sept. 30 of each year. In 2004, rising prices hit wholesalers
with a 3.8 cent a gallon increase on gasoline and a 5.2 cent a
gallon increase in diesel fuel – which they quickly passed on to
consumers, according to the Erie Times-News.
[neWLine]
The increase in 2004 came as average wholesale oil prices
increased from 91 cents a gallon to $1.17 a gallon.[neWLine]
One positive down the road, the oil franchise tax is capped at
$1.25 a gallon so there’s little room for an increase, even if oil
prices were higher than that. And if wholesale prices drop in 2006,
so would the oil franchise tax.[neWLine]
Where does this money go? Into the state’s Motor License Funds
to be used for work on the state’s highway and bridges. Some would
be funneled to local governments to take care of streets and
roads.[neWLine]
OK, so 1.2 cents a gallon isn’t much. But let’s consider the
overall costs.[neWLine]
Since 2000, the liquid fuels tax has remained at 12
cents a gallon but the oil franchise tax has been 13.9 cents in
2000; 14 cents in 2001; 14.6 cents in 2002; 13.9 cents in 2003;
14.2 cents in 2004; and 18 cents in 2005.
[neWLine]
Overall, that means gas tax has gone from 25.9 cents a gallon in
2000; 26 cents in 2001; 26.6 cents in 2002; 25.9 cents in 2003;
26.2 cents in 2004; and 30 cents in 2005.[neWLine]
The Erie paper reported some efforts are under way to halt the
2006 increase – but we wouldn’t hold our breath. As we know so
well, taxes (and death, of course) are inevitable.
