Fuel Tax Relief Still the Best Way to Help Utahans Cope with Prices, Taxpayer Group Tells Governor Huntsman

(Alexandria, VA) -- To take the sting out of gas prices in the Beehive State, Governor Jon Huntsman should follow through on his concern for consumers and suspend state taxes on fuel: that's the message the 400,000-member National Taxpayers (NTU) presented today in an open letter to the Governor. The non-partisan citizen group has nearly 3,700 members in Utah.

"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 Huntsman.

Yesterday media reports indicated that Huntsman and Senate President John Valentine were at least open to a moratorium on fuel tax collections (which would require the Governor to call a special legislative session). However, members of the Governor's staff have subsequently downplayed his remarks, while other officials have floated the possibility of imposing discredited price caps on gasoline. Amidst all of this rhetoric, Rasmussen contends that tax relief remains the best alternative for action among Utah policymakers. Among the reasons, as outlined in her letter:

  • The Federation of Tax Administrators reports that Utah's state-level fuel excise tax of 24.5 cents per gallon is 13th-highest in the nation. "This heavy burden ought to command the attention of policymakers even without the pressure of volatile prices," Rasmussen remarked.
  • When the federal gas tax of 18.4 cents is added in, Utah's drivers are shelling out $6.44 for taxes on a typical 15-gallon fill-up. Thus, suspending the state portion of this total would result in modest yet tangible savings for motorists.
  • With projected revenues running at $3.87 billion and a budget reserve of $180 million, Utah could absorb any revenue "losses" from enacting fuel tax relief.

Rasmussen warned that taking a wait-and-see stance or pursuing "failed relics of the Nixon era" like price caps would be a "grave political mistake that ignores the very real plight that Utah residents are facing over gas prices -- a plight they hope elected officials will address in a quick and constructive manner."

"Surely the state can afford to give back to overburdened motorists by suspending the gas tax ...," Rasmussen stated in her letter to the Governor. "Your active leadership would ensure that beleaguered Utah 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 Huntsman, along with numerous studies and commentaries on transportation policy, may be accessed online at www.ntu.org.