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Hochul casts doubt on return of gas tax holiday in 2023

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The state isn’t expected to extend its partial gas tax holiday that expires New Year’s Eve, Gov. Kathy Hochul said Friday.

Lawmakers included a six-month suspension of about 16 cents per gallon in state excise and sales taxes, meaning New Yorkers will see their gas prices increase in the new year.

The average gallon of gas in New York costs about $3.44 per gallon, according to AAA — a decrease of more than a dollar since the spring.

That’s why Gov. Kathy Hochul says the gas tax suspension likely won’t be extended next year.

“They have been on a steady decline, and so at this point, we are saying those are revenues that we need to maintain our roads to make sure that we don’t have potholes in the wintertime,” Hochul said at an unrelated briefing in Albany County. “It needs to go back toward being dedicated toward transportation.”

Extending the gas tax holiday wasn’t something lawmakers seriously considered when they returned to Albany for a special session this week and voted to increase their salaries to $142,000 — a 30% pay raise — and limit their outside income.

The suspension and other proposals to give New Yorkers relief amid continuing high inflation and double-digit increases in utility expenses didn’t make the Legislature’s list of priorities before the holiday.

Senate Majority Leader Andrea Stewart-Cousins says legislative leaders will address affordability and related assistance for New Yorkers in upcoming budget negotiations. 

“It’s not that we are unconscious about what people are experiencing,” the Democrat from Yonkers said. “We will continue to focus on it and we have.”

She noted an early middle-class tax cut helped give people in the state relief.

Republicans blasted Democrats, who hold a legislative supermajority, for acting to help themselves and nothing for constituents struggling to make ends meet.

Stewart-Cousins on Thursday also said legislative leaders never want to conflate altering their compensation with other policy changes.

Senate Minority Leader Rob Ortt, a Republican from North Tonawanda, replied that claim is “laughable,” and wasn’t informed of that rule.

“So are we telling the constituents that our brains are only so big that we can only handle compensation today? …[that] ‘I couldn’t possibly do other things, but yet, I deserve this pay raise?'” Ortt said after the Senate’s special session concluded. “So you know, it’s almost an argument against the pay raise itself that we can’t walk and chew gum at the same time.”

Ashley Ranslow, director of the state chapter of the National Federation of Independent Business, said the 16-cent relief made a difference for small businesses.

“Even if it’s just 16 cents per gallon, that adds up,” she said. “These are savings that small businesses really desperately needed at a time where they were facing 40-year high inflation, supply chain disruptions and labor shortages, which were driving wages higher.”

The NFIB will push for the suspension to be reinstated as businesses work to recover from economic fallout, tax cuts for small businesses and unemployment insurance relief.

Ortt supports extending the partial gas tax suspension at least another year, if not two.

He said he’ll urge Hochul to include it as part of relief for New Yorkers in the next budget when he meets with the governor and Assembly Minority Leader Will Barclay in early January to discuss their priorities for next session.

“We still have one of the highest gas prices anywhere in the country largely because of the taxers that are assessed on it,” Ortt said.

New Yorkers pay between 47 and 48 cents total in taxes per gallon of fuel.

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