Ease Consumers' Pain at the Pump, Roll Back Gas Tax, Taxpayer Group Urges Governor Carcieri

(Alexandria, VA) -- Rhode Islanders deserved relief from the highest state gas tax in the nation even before Katrina-related fuel supply disruptions shaped recent price spikes, according to an open letter sent to Governor Donald L. Carcieri today from the 400,000-member National Taxpayers Union (NTU). The non-partisan citizen group, which has over 1,300 members in Rhode Island, is urging Carcieri to permanently lower or temporarily suspend state gas tax rates.

"It is our belief that such a move would be the best solution available for assisting consumers in your state in this time of crisis, ... [as all] aspects of your state's economy are affected by rising gas prices," NTU Government Affairs Manager Kristina Rasmussen wrote.

A little over a week ago, Georgia's Sonny Perdue became the latest Governor to temporarily suspend by Executive Order the state's per-gallon and sales taxes on gasoline (following those in Illinois and Indiana who did so in 2000). On Thursday, West Virginia Governor Joe Manchin announced he would freeze a gas tax increase scheduled to take effect on January 1, 2006. While laws in some states can 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.

According to the Federation of Tax Administrators, Rhode Island motorists are currently forced to haul the heaviest state gasoline excise tax burden in the United States. When combined with the 18.4 cent-per-gallon federal levy, it weighs in at nearly 50 cents per gallon, or the equivalent of $7.41 on a typical 15-gallon fill-up. Rasmussen noted that lightening the state's portion of this onerous load was long overdue and "would have a modest but measurable impact on consumers."

However, Rasmussen cited other reasons why Carcieri should act decisively on behalf of Rhode Island residents. The state, which expects to collect $2.98 billion from taxpayers in 2006 and currently enjoys a $40 million budget surplus, could absorb any revenue "losses" that might occur from fuel tax relief.

"Although using budget reserves to fund new spending programs may be tempting, lowering state gas taxes immediately is the better way to assist Rhode Islanders," Rasmussen concluded. "Your active leadership would ensure that beleaguered Rhode Island 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 Carcieri, along with numerous studies and commentaries on government transportation policy, may be accessed online at www.ntu.org.