Gas Tax Holiday Resurfaces

Last March, Governor Justice dismissed the idea of a gas tax holiday. Justice said the Democratic proposal to temporarily suspend the state’s 35.7-cents-per-gallon tax to give motorists a break on their fuel bills was a gimmick.

“This is nothing but a political stunt, designed to get their names in the headlines and make me look like the bad guy,” Justice said.

The leaders of the Republican supermajorities in the House and Senate stood with the Governor, so that was that. But then this week Justice appeared to reconsider.

Justice said during a media briefing Monday that he was more open to the idea. “I’ve done a lot of thinking about maybe a gas tax holiday, and I want to hold up just a little bit longer until our next briefing,” he said.

It is unclear what triggered the Governor’s change of heart. Maybe he is feeling more pressure from West Virginians as gas prices reach record highs of near or above the $5.00 a gallon mark. Maybe he is frustrated over not getting what he believes is the proper credit for the $1.1 billion budget surplus and he wanted to do something politically popular.

Or maybe, as is often the case with Justice, he was just thinking aloud, and he is no more interested in a gas tax holiday now than he was back in March. Based on his comments, we should find out soon enough.

However, the Governor’s advisors are likely reminding him that the position of legislative leaders has not changed. Senate President Craig Blair (R, Berkeley) was blunt during an appearance on Talkline Tuesday. “The gas tax (holiday) is a knee-jerk reaction, and it’s shortsighted,” he said.

Blair is focused on what he believes are more meaningful tax reductions, such as eliminating the property taxes on vehicles and machinery, equipment and inventory. Meanwhile, House Republicans are more interested in income tax reductions.

At best, a gas holiday would have minimal impact. For example, a motorist who drives 1,200 miles a month in a vehicle that gets 25 miles per gallon would save about $17. Yes, every little bit helps during these inflationary times, but we are not talking about huge savings.

The psychological benefit of a $0.36 cent drop in price may be quickly negated if the retail price of fuel continues to rise. New York state lowered its gas tax by $0.16 cents last week but that has been wiped out by increasing prices.

The biggest beneficiary of a gas tax holiday would be out-of-state truckers who pass through West Virginia. They would get a break on diesel fuel, while avoiding a tax that generates money for the state road fund.

The state’s best option is to continue collecting the gas tax and direct the uncommitted portion of the  $1.1 billion surplus to the road fund for repairs and construction. At least then the motorists suffering through these high gas prices can see their tax money at work on the roads.





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