Creates the federal tax elimination supplemental tax to take effect if the federal fuel tax rate is reduced below 5 cents per gallon

BILL NUMBER:S3078

Title of bill

An act to amend the tax law, in relation to the creation of the federal tax elimination supplemental tax

Purpose

This bill would create the federal tax elimination supplemental tax to take effect if the federal fuel tax raze is reduced below 5 cents per gallon.

Summary of specific provisions

Article 12-A of the tax law is amended by adding a new section 284-b which would only be implemented or 'triggered' if the federal fuel tax falls below the rate of 5 cents per gallon. This legislation would not increase the tax the consumer would pay at the pump for every gallon of gas, but would maintain the current tax rate and allow the State, not the federal government, to use that money for desperately needed road and bridge repairs and mass transit.

Currently the federal government collects this revenue and distributes to the states as they feel is appropriate. With the 'Trigger' legislation the money collected by the state will enable New York to utilize this important funding stream for critically needed repairs to our infrastructure without actually increasing the taxes paid at the gas pump. The consumer will see no tax increase but will reap tremendous benefits throughout the state with 75 percent of the revenue assigned solely to the dedicated highway and bridge trust fund established pursuant to section eighty-nine-b of the state finance law for road and bridges. The remaining 25 percent will be dedicated to the mass transportation trust fund established pursuant to section eighty-nine-c of the state finance law to be spent on mass transportation. Additionally, the consumer will see a total tax decrease of approximately $.05 per gallon of gas.

Justification

New York's roads and bridges are in deplorable condition and our mass transit systems are also suffering greatly from the poor economic climate and New York's inability to control spending. For many years, the state has seen fit to siphon critical revenue intended for transportation related expenses between non transportation related purposes leaving our transportation system in a shambles. This bill will rectify some of that misguided spending by focusing gas tax revenue solely on road and bridge repair and necessary mass transit expenditures.

Five other states have enacted similar statutes to be prepared to use these funds for transportation costs should the federal government let the collection of these dollars expire. California passed legislation in 2011, Arkansas in 1953, Oklahoma in 1965, Nevada in 1973 and the Tennessee statute took effect in 2009.

Because New York State currently transfers more revenue to the Federal Government under the gas tax than it receives back in federal transportation funding, this legislation would significantly increase the funds available for transportation should it be triggered by the expiration of the federal tax.

Fiscal implications

Increased revenue for the state is undetermined.

Effective date

This act shall take effect immediately.