Rendell Shouldn't Wait to Cut Commonwealth's Fuel Taxes, Nation's Largest Taxpayer Group Says

(Alexandria, VA) -- Fuel supply turmoil from Hurricane Katrina is just one of many reasons why Governor Ed Rendell should act now rather than later to suspend state gasoline taxes, according to an open letter sent to Rendell today from the 400,000-member National Taxpayers Union (NTU). The non-partisan citizen group has over 20,000 members in Pennsylvania.

"NTU encourages you to permanently lower state gas tax rates or provide temporary relief through a 'gas tax holiday,'" NTU Government Affairs Manager Kristina Rasmussen wrote to Rendell. "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."

Rasmussen noted that last week Georgia's Sonny Perdue became the latest Governor to temporarily suspend by Executive Order the state's taxes on gasoline. Although Governor Rendell does not have this prerogative, he could call the Legislature back into session early to consider easing the gas tax bite -- an action he recently told reporters he would take if gas prices "rise dramatically." However, Rasmussen contends there are other factors at work to suggest Rendell should move immediately on tax and regulatory relief, such as:

  • Pennsylvania's fuel tax burden weighs in as the second-heaviest in the nation, and could have claimed the number one spot had a proposed gas tax hike to bail out mass transit been enacted. "Commonwealth motorists would deserve a tax reduction even without the current fuel price flap," Rasmussen observed.
  • The recent, controversial salary increase for state lawmakers and other senior members of government puts a special obligation on officials to show some leadership. "Millions for pay hikes and not one penny for fuel tax relief won't sit well with Pennsylvanians who are already fed up with the political establishment," Rasmussen quipped.
  • At a combined federal and state tax rate of just under 50 cents per gallon -- adding more than $7 to the price of a typical fill-up -- suspending the Commonwealth's portion of the fuel tax would provide noticeable cost savings to most consumers.
  • Pennsylvania's expected revenues of over $23 billion, combined with a $300 million budget surplus and a $135 million legislative "slush fund," indicate that the Commonwealth should "give back to overburdened motorists" (in Rasmussen's words) rather than squander resources on additional government programs.

"Although using budget reserves to fund new spending programs may be tempting, lowering state gas taxes immediately is a better way to assist Pennsylvanians as all taxpayers and aspects of your state's economy are affected by rising gas prices," Rasmussen wrote in her letter to the Governor. "Now is the time to use surplus state revenues generated in recent years by strong economic growth to cushion the blow."

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