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Gas tax cut hits a few bumps in the road

Some legislators say there's no guarantee that consumers would get a break at the pump.

By JO BECKER

© St. Petersburg Times, published April 12, 2000


TALLAHASSEE -- With gas prices still high, House Speaker John Thrasher remains committed to giving consumers a tax break at the pump. But members of his own party are beginning to question the wisdom of the plan.

House lawmakers are considering a tax cut of 5 cents per gallon for two months or 10 cents for one month. But the concern some Republicans are raising is that the tax break may never directly benefit consumers at the pump.

The tax is collected by wholesalers, who build it into the per-gallon price that stations pay.

Rep. Jim Fuller, R-Jacksonville, said Tuesday that if the Legislature enacts the tax cut, the prime beneficiaries may be gas stations, not consumers.

"I could have 100 gas stations and not pass (the tax break) on to the customer," Fuller said. "Or maybe I might not change my prices for three or four days."

Proponents of the tax break say that competition will force gas stations to drop their prices. But Fuller said that may not be true in every case.

"That may work when you have gas stations on either corner, but what if you are out there by yourself and there's no other stations near?" Fuller said.

Rep. George Albright, the Republican chairman of the powerful House Finance and Taxation Committee, said he shares some of Fuller's concerns.

"I wouldn't vote for the bill the way it is today," said Albright of Ocala.

However, Albright said Tuesday was not the day to debate the gas tax break.

It came up at the Fiscal Responsibility Council meeting, where members were asked simply to forward a shell bill on to Albright's committee. There, lawmakers will shape, debate and vote on it before it comes before the full House for a vote.

Thrasher's spokeswoman, Katie Baur, said that before any bill passes, concerns such as Fuller's will be addressed.

"We are going to ensure that the tax relief is felt by consumers -- and no one else -- at the pump," Baur said.

Democrats had other problems with the bill. Gas taxes are dedicated to transportation projects. Lawmakers plan to replace any revenue lost from a gas tax break with general revenue dollars from sources such as sales taxes.

"There are so many other needs" for those general revenue dollars, said Rep. Marjorie Turnbull, D-Tallahassee. The Senate's budget does not contain a tax break, though it could become a bargaining issue later in the session. Gas prices are higher now than at any other time since the Persian Gulf War. The price of regular self-serve gas has shot up nearly 60 cents a gallon in the past year, the largest one-year increase ever. The Energy Department thinks gas prices will peak this month before declining to about $1.46 a gallon for the summer.

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