"Cushion the Blow" of Price Spikes, Provide Fuel Tax Relief, Taxpayer Group Urges Kempthorne

(Alexandria, VA) -- Although Idaho lawmakers may be tempted to use budget reserves for new spending programs, this money would be best devoted to helping cash-crunched consumers who've been hit hard at the pump: that's the message the 350,000-member National Taxpayers Union (NTU) sent to Governor Dirk Kempthorne in an open letter today. The non-partisan citizen group, which has nearly 2,900 members in Idaho, is urging him to lower the state gas tax rate or provide temporary relief through a "gas tax holiday."

"Given the ongoing price spikes associated with supply disruptions caused by Hurricane Katrina and record-setting gas costs that have been plaguing motorists for much of 2005, now is the time to use surplus state revenues generated in recent years by strong economic growth to cushion the blow," NTU Government Affairs Manager Kristina Rasmussen wrote to Kempthorne.

A little over a week ago, Georgia Governor Sonny Perdue temporarily suspended by Executive Order the state's per-gallon and sales taxes on gasoline. On Thursday, West Virginia Governor Joe Manchin announced he would freeze a gas tax hike scheduled to take effect on January 1, 2006. While laws in some states limit the authority of chief executives over tax policies, all Governors can at least call special sessions of their State Legislatures to enact fuel tax relief.

Rasmussen noted that Idaho motorists currently pay the 11th-highest state gas excise tax in the nation, at 25 cents per gallon. When combined with the federal fuel tax, this burden weighs in at over 43 cents per gallon, or the equivalent of $6.51 on a typical 15-gallon fill-up. "Lightening the state's portion of this load would have a modest but measurable impact on weary consumers," Rasmussen said.

However, Rasmussen cited other reasons why Kempthorne should act decisively on behalf of Idahoans. That state, which expects to collect $2.16 from taxpayers this year and currently enjoys a budget reserve of $200 million, could absorb any revenue losses from fuel tax relief "without fear of creating a fiscal imbalance."

"Lowering state gas taxes immediately is the [best] way to assist Idahoans as all taxpayers and aspects of your state's economy are affected by rising gas prices," Rasmussen concluded. "Your active leadership would ensure that beleaguered Idaho motorists can better cope with this trying time."

NTU is a non-profit organization working for lower taxes, smaller government, and economic freedom at all levels. Note: Rasmussen's letter to Kempthorne, along with numerous studies and commentaries on government transportation policy, may be accessed at www.ntu.org.