County Lifts Sales-Tax Cap On Gasoline Sales

OSWEGO COUNTY, NY – Though the decision was not unanimous, Oswego County lawmakers decided Thursday to lift a two-year-old sales-tax cap on gasoline.

Now, officials are waiting for the revenue stream that is anticipated once the change goes into effect.

Approved in June 2006, the cap made it so that the county’s sales tax was only charged on the first $2 per gallon of gasoline purchased in Oswego County. The city of Oswego did not adopt the cap.

“(The cap) was intended to reduce fuel prices and provide some relief to gasoline and diesel consumers,” County Administrator Phil Church said in an informational memo on the resolution. “However, analyses by this county and other counties indicate that local caps on motor fuel sales tax have, at best, only a temporary effect on what consumers pay at the pump.”

Church regarded the cap as a “well-intentioned goal of creating sustained savings for the consumer” that was “negated by regional and world market forces in the oil industry.”

“There is little or no evidence that savings from the cap are passed on to consumers over the long term,” Church wrote.

Oswego County was one of 14 counties that adopted the cap. Since that time, eight have rescinded their decisions or allowed the local legislation to sunset, he noted.

At current prices, Church indicated that the county, towns and the city of Fulton are losing just more than $3 million in annual sales tax revenues. By lifting the cap, lawmakers anticipate recapturing those revenues “for local benefit to offset property taxes,” he noted.

In a fact sheet distributed Thursday, Church explained that if the state issues the county a waiver and lifts the cap Sept. 1, Oswego County would receive an additional $1 million in sales tax revenues by the end of 2008 through the change. As fuel prices rise, so would the revenues for the county and municipalities.

If no waiver is issued, the cap will lift Dec. 1 and the additional revenues anticipated for 2008 would reduce accordingly.

During public comment, Hannibal resident John Metelsky supported the decision to lift the gas cap. He also suggested that the county allow the 4 percent sales tax to expire.

Metelsky noted that the two changes together could provide substantial benefits for Oswego County as it receives more for gasoline sales tax while it attracts more shoppers by having a smaller sales tax rate than neighboring municipalities.

“The timing is perfect,” Metelsky suggested. “The public is going to need a break.”

Granby Town Supervisor Ed Williamson also supported lifting the gas cap.

“I believe that’s the right way to go,” Williamson said.

Prior to the vote, legislator Doug Malone, D-Oswego Town, introduced an amendment to the resolution that would state any additional sales tax revenues the county receives from gasoline purchases would be used specifically to reduce property tax.

Legislator Kim Seager, R-Phoenix, pointed out that the wording in the resolution was provided by the state and had to be very specific. She noted that any changes in the wording locally could have resulted in its defeat at the state level.

Legislator Arthur Gearsbeck, R-West Monroe, said he did not support lifting the cap and suggested that the additional sales tax dollars would hurt residents more than it will help.

“We don’t need this money,” Gearsbeck said. “You are putting an extra burden on the taxpayer.”

“I don’t think you understand what this us,” answered Chairman Barry Leemann. “We are not adding a new tax.”

“Yes you are,” Gearsbeck responded.

In a roll call vote, the decision passed 19-4 with Gearsbeck, Malone and legislators James Bryant and Kevin Gardner opposed. Legislator Linda Lockwood was absent and legislator Clayton Brewer abstained from the vote, he explained, because he operates a gas station.

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