Texas Gas Tax Relief

The Price at the pump is surging again and gasoline prices may hit $3 this summer. Amendment (Senate Bill 1886) submitted by Rep. Trey Martinez Fischer, D-San Antonio was approved by a wide margin in the Texas House; you could refer to it as "tax-free gas" for the summer 2007 driving season. The tentatively adopted measure approved on May 8, 2007 would temporarily suspend the state's 20-cent gas tax during the 2007 summer months.

The summer months are typically a time of increased gasoline purchases due to family vacations and road trips. Should this amendment pass the Senate, it would mean an immediate 20-cent drop in the price per gallon tax which has been in place since 1991. According to Lt. Gov. David Dewhurst, the suspension of the gasoline tax will be difficult to pass, "particularly at a time when we're trying to find more resources to build highways and reduce congestion."
State Representative Fischer remains optimistic that the Senate will bow to increasingly weary Texans when it comes to higher gas prices. "My constituents are saying, 'Gas is too high,' and I imagine the Senate is hearing from the same constituents".

Fischer's amendment to a gas-tax collection bill would repeal the state's gasoline tax for 90 days. This is estimated to cost the state an estimated $500 million to $700 million dollars toward highway construction and public education. The estimated cost would be absorbed by the current $8 billion budget surplus; funds which are currently split almost evenly between money set aside for future school property tax cuts and the state's Rainy Day fund. "That fund goes to times when we are in crisis and, right now, with gas prices through the roof, there is a crisis," Martinez Fischer said. "The last time I checked, that money belongs to the people of Texas."

The Texas House of Representatives approved Senate Bill 1886 by a 118-16 vote; the Senate is expected to vote on the measure in the near future. Should the Senate agree with the changes, the amended bill, including the gas tax suspension, will go to the governor's desk where it could be signed into law. If the Senate does not pass the bill, members of each chamber would be appointed to a special conference committee to negotiate a compromise.

Property Tax Relief

Senate Finance Chairman Steve Ogden, R-Bryan, called the proposal to the omnibus tax collection bill "very creative" adding a prediction the tax holiday would not survive the Texas Senate. "The surplus needs to be used to pay for property tax relief, and that's what we're going to do." Texas is sitting on a record surplus budget, and state leaders have suggested saving that money in order to give property tax relief in two years. Again, this suggested property tax relief would come in two years, as opposed to saving money this year, right now.

Representative Fischer said that the average homeowner in his district would only save $79 in school property tax cuts which is less than what a two-car family could save under a 90-day gasoline tax freeze would provide. Representative Fischer also noted that airlines don't pay any state tax on jet fuel they buy in Texas; If it's good enough for them, then it's good enough for the average working family.

"The more cars you have, the more relief you get.". "We're sitting here on record savings. We used to say around here it's the people's money. We ought to give it back." If Perry signs the amended bill, the gasoline tax relief would take immediate effect and be good for 90 days. This will cover most of the typically high-priced summer driving period and allow most travelers to do more things with their vacation dollars.
According to Gov. Rick Perry, the tax reprieve goes far enough and has called for lawmakers to deliver $2.5 billion in tax relief this session. According Perry spokesman Ted Royer, the Governor applauds lawmakers for looking at ways to reduce the Texas Tax Burden, yet he believes taxpayers deserve more than $500 million in relief when the state has a record budget surplus.

Senate Not Expected to Pass

While House Ways and Means Chairman Jim Keffer, R-Eastland, voted for Martinez Fischer's amendment, he avoided any discussion regarding the prospects of the gas tax break surviving the final three weeks of the session. House Speaker Tom Craddick, R-Midland, appears to be sympathetic saying that "There's a lot of people concerned out there about the cost of gas and how much it's gone up in the last week or two. I think probably every member of the Legislature feels the same. and (that they) would like people to be paying less in gasoline prices." Sen. Leticia Van de Putte, D-San Antonio, speculated that it would be difficult to vote against a gasoline tax break. "Texas voters would love paying 20 cents less per gallon every time they fill up. at least for 90 days." She further mentioned that Texas voters would be continue to be happy, at least until the 91st day; then "people are going to be really mad."

According to a weekly AAA Texas gasoline price survey, retail prices of regular-grade gasoline rose an average of 9 cents to $2.87 per gallon in the first week of May, 2007. Nationally, regular grade gasoline prices rose 11 cents to an average of $2.99 per gallon. A sign of concern in Washington over near record-high gasoline prices has become evident, the Senate Commerce Committee on Tuesday approved legislation calling for the most significant increase in vehicle fuel efficiency in decades.
Awaiting Senate approval is a a bill to boost mpg: The measure would boost the fleet-wide average fuel economy standards to 35 mpg by 2020, up from 25. The bill is backed by a number of lawmakers previously opposing tougher standards. The proposal comes at a time when congressional Democratic leaders have pledged to pass legislation to address climate change.