GOP calls for state gas tax cut

GOP calls for state gas tax cut  

Publication: Charleston Daily Mail
Release Date: 03/17/08
Contact: Jake Stump

In 2006, when gas prices across the country began to skyrocket and West Virginians were hit particularly hard, Gov. Joe Manchin used his executive power to freeze a proposed increase in the state's gasoline taxes.

But with gas prices now reaching an all time high - per-gallon costs are higher in West Virginia than all but four other states - Manchin has no immediate plans to make any changes in the state's gas tax.

House Minority Leader Tim Armstead, R-Kanawha, said a reduction in the state gasoline tax is needed immediately. A cut has been long overdue, he said.

"I'd like to see us reduce the gas tax," Armstead said. "It may not be a large portion, but it's one area where we could provide relief to citizens."

Manchin's office said the situation was different in 2006, when fuel production was down because of Hurricanes Katrina and Rita.

"That was because of a true natural disaster that caused disruptions to the system," said Lara Ramsburg, Manchin's spokeswoman. "It's difficult to make the same changes because of everyday market adjustments. As much as we'd like to do away with gas taxes, it's not realistic. As you know, our road fund is always struggling financially to meet the road maintenance demands that we have in West Virginia."

Republicans have tried unsuccessfully to cut the tax in previous years. But opponents of those proposals say the ailing State Road Fund relies heavily on the tax, which brings in about $400 million a year. 

Motorists in West Virginia pay 32 cents per gallon in state gas taxes. Combining that with federal taxes, consumers in the state cough up 50 cents per gallon on top of the price of gas.

The state ranks 13th in the country for total gas taxes as drivers here pay about 3 cents above the 47-cent national average.

The tax rate usually changes every year and is based on the wholesale price of gasoline. Broken down, the state levies a per-gallon excise fuel tax of 20.5 cents. The variable wholesale tax accounts for the remaining 11 cents of the total state tax.

According to the American Automobile Association, the average retail price of gas in West Virginia today was $3.39.

In 2005, West Virginia imposed the fifth-highest state fuel tax in the country, but a handful of states have since surpassed the Mountain State.

With the exception of Pennsylvania, which imposes nearly 51 cents in combined state and federal taxes, motorists in West Virginia pay more than its neighbors.

"Every time we've tried to reduce the gas tax, we get the argument that it's used to maintain roads," Armstead said. "I'd like to separate the two. We shouldn't have to tie the gas tax to the road budget."

Armstead said he thinks there is enough money in the state's general revenue budget to funnel some to road maintenance.

Ramsburg said the governor has taken steps in other areas to address the gas price issue, such as focusing on becoming energy independent.

And she noted that the state itself also feels the burden of high gas prices.

"As gasoline prices increase for the public, they also increase for our DOT vehicles," she said. "So we're caught in a situation in which we need to keep the variable rate formula in place or risk getting even further behind on road funding than we are now."

The variable wholesale part of the tax was imposed in 1983 by the Legislature to generate money for the State Road Fund.

Armstead said his fear is that gas prices will continue to escalate through the summer and fall months, when the tax rate is formulated for the following year.

"If prices continue to rise in that period, I'm afraid that's going to increase the tax on the citizens," he said. "If gas prices approach $4 from July through September, we'd certainly want to look at giving relief in terms of cutting the gas tax. It's a tremendous burden on citizens right now."

Contact writer Jake Stump at jakest...@dailymail.com or 348-4842.