By Becky Wydysh
Niagara County Legislature Chairwoman
As I am writing this column, the average price of a gallon of gasoline in Western New York, according to AAA, is $4.24 a gallon. One year ago, that same gallon of gas cost $2.86. Clearly, the rise in gas prices, and the overall inflation of prices on everything, is hitting the wallets of families across Niagara County.
In the recently enacted New York state budget, the state suspended an excise tax and sales tax on gasoline, and authorized counties to follow suit by capping their own local sales on gas purchases. While the county portion of sales tax is relatively small, the sentiment was that the state and county actions taken together could provide some much-needed relief to motorists.
With that in mind, the Niagara County Legislature voted unanimously this week to cap our county sales tax of 4% at the first $3 per gallon. Let me clear what this means, since this has created some confusion. At $4.24 per gallon, consumers would pay the county sales tax only on the first $3, meaning the last $1.24 would not be taxed.
It has been estimated that the state and county actions – both of which take effect on June 1 – will lower gas prices anywhere from 20 to 25 cents per gallon. When you are dealing with increasing prices on everything – most notably in the grocery store – every little bit of savings helps.
The county sales tax cap will mean about $2 million in lost revenue to the county. But it is important to remember that the county budget was based on sales tax estimates that predated these spikes in prices. The fact is, the county collects more in sales tax revenue during periods of inflation, because higher prices mean more sales tax. Our county manager and county budget director believe the integrity of our county budget is not impacted with our action on the gas sales tax. This is important, because it would not make sense to cap the gas tax and then have a revenue shortfall that impacted our ability to maintain a budget under the property tax cap.
Several of my colleagues raised another important issue, and that’s how we ensure that every penny in reduction of gas taxes goes directly into the pocket of consumers at the pump. The state Attorney General’s Office has made it clear that they will be monitoring this very issue and will take appropriate action if gas prices are kept artificially high to profit from the tax relief. I’m hopeful this will ultimately not be a problem.
Clearly, county legislators are very limited in our ability to impact the price of gasoline, so we took the opportunity to make an impact where we could. While most people I have talked to are supportive of our cap on the sales tax, some have said the savings just are not significant enough to bother. However, for anyone who has ever experienced living paycheck to paycheck, we know that every nickel matters.