Wagoner questions fuel tax suspension

Posted: Thursday, May 04, 2006

Two Alaska Legislature democrats Tuesday asked Gov. Frank Murkowski to add a temporary motor fuel tax relief plan to the agenda of a special session set to begin May 2.

In a letter to the governor, Sen. Johnny Ellis, D-Anchorage, and Rep. David Guttenberg, D-Fairbanks, said tax relief could come by suspending the state tax on auto, marine and aviation fuel for 90 days. Those taxes currently add 4.7 cents to 8 cents per gallon.

It does not appear at this time that the governor wants to add other issues to the special session agenda.

“The governor believes the Legislature needs to focus on the gas pipeline contract in the special session,” said Becky Hultberg, the governor’s press secretary.

She did add, however, that there was still time in the regular session for lawmakers to consider suspending the state’s fuel tax levy.

A tax suspension coinciding with the summer driving season would be a help to Alaskans affected by the high price of gasoline, Ellis and Guttenberg said.

“In this time of high fuel prices and a huge budget surplus, the state needs to do its part to ensure Alaskans aren’t paying outrageous prices at the pump,” Senate Minority Leader Ellis said in a press release.

“This is a good opportunity to offset these high prices and encourage summer travel in the state. It’s a small amount that is in the state’s control, but every little bit helps.”

Sen. Tom Wagoner said providing tax relief from the high price of gasoline is not an original idea.

Over the past few weeks, he said, he’s been weighing the pros and cons of introducing a bill that also would suspend of the state’s fuel tax not for 90 days, but whenever the price of a barrel of oil topped $50.

However, Wagoner said he has decided against proposing a bill this year because of the workload surrounding debate over the governor’s oil tax reform plan and the approaching end-of-session commotion surrounding passage of the capital budget and other pending legislation.

If Murkowski changes his mind to add Ellis’ and Guttenberg’s proposal to the special session agenda, or if a bill is introduced in the Legislature, Wagoner said he would see it come through the Senate Resources Committee, which he chairs.

“We would do what we could with it there,” he said.

However, it would be likely to change. Wagoner said he disagrees with the democrats’ approach and likely would not support a mere 90-day suspension of the tax.

“It’s like playing patty-cake with (the issue),” he said. “I’d stick pretty tough to the $50-per-barrel idea, unless someone comes along with a better mousetrap. Ninety days doesn’t even get us through the summer.”

Wagoner said he would prefer tying the tax to the per-barrel price of oil, because that could mean tax relief regardless of the time of year.

“If the price goes over $50 a barrel, boom, it’s gone,” he said.

There is another issue, however, that must be addressed regarding suspension of the fuel tax.

“The other kicker is that we can’t afford not to have the tax money in the budget for road maintenance. That’s where it goes. We’d have to back fill that money into the budget,” he said.

Backfilling would be a separate appropriation from the general fund, he said.

Wagoner said he plans on introducing a bill tying fuel tax relief to the price of a barrel of oil next year.

Guttenberg said he could back tying a fuel tax suspension to the price of a barrel of oil, and has no problem with seeing the 90-day temporary suspension idea expanded.

“You put your idea on the table and it evolves,” he said. “The idea is to get relief to people paying exorbitant gasoline prices.”

Ellis and Guttenberg noted that while oil companies are registering record profits, consumers are seeing steadily increasing prices at the pump. In the past three years, the average price of unleaded gasoline in Alaska has added more than $1 to the price of a gallon from about $1.70 per gallon to around $2.80 per gallon.

They also noted that that price increase has closely followed the rising price of North Slope crude, the taxes from which are swelling the state’s coffers.

Murkowski cannot suspend the fuel tax by himself, but he can present the decision to the Legislature, the democrats said.

Adding the issue to the special session agenda would mean a tax relief proposal could be decided in conjunction with proposed amendments to the Stranded Gas Development Act and the gas line contract.

Some kind of relief should be considered soon, House Minority Whip Guttenberg said.

“Alaskans are simply paying too much for gas. The unprecedented wealth we now receive from oil taxes should translate into savings for those who need it the most, Alaskan consumers,” he said.

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