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Legislative Democrats renew call for gas tax holiday as Justice statement on enacting one expected Wednesday

MORGANTOWN — The day after Gov. Jim Justice announced he plans some kind of decision on a possible gas tax holiday, legislative Democrats restated their desire to move ahead with one.

Justice said Monday that he expects to have a decision on including the holiday in a special session call by Wednesday. Legislative interims run June 12-14 and a special session would likely run concurrently. The next opportunity would be the July 24-26 interims.

Democrats spoke to the press on the issue Tuesday.

Senate Minority Leader Stephen Baldwin, D-Greenbrier, said, “To me it’s really simple. Folks are struggling right now.”

According to AAA, the statewide average gas price jumped another 11 cents between Justice’s and Baldwin’s comments. It was $4.63 per gallon for regular Monday; $4.72 in Monongalia County. On Tuesday, it was $4.74 statewide; $4.79 in Mon County. Diesel was $5.67 Monday; $5.72 Tuesday.

Baldwin said he talked to a small-business owner who said half his revenue is going to fuel costs; a parent who had to stop driving kids to summer sports; and a beautician whose business is down 70%, because people are cutting back on spending.

Democrats have put forth two proposals for tax relief. One is a simple suspension of the 35.7 cents-per-gallon tax for a month, with the possibility of Justice granting 30-day extensions, either under authority of a bill passed during a special session, or by executive order under the ongoing COVID state of emergency.

The other is a rebate to West Virginia vehicle owners. Based on an estimated 571,447 registered vehicles in the state, a one-month, $50 rebate would cost about $30 million, they said. A two-month, $100 rebate would cost $60 million. (A figure of $35 million a month has been mentioned other times.)

Either method would disrupt Road Fund revenue, and they propose making it up from surplus. At the end of May, fiscal year revenue was $1.07 billion above estimates, and legislators mentioned that about $300 million of it is uncommitted in next year’s budget.

Baldwin said they will be hoping to recruit support for a holiday by sending a letter to all 134 legislators.

Delegate Shawn Fluharty, D-Ohio, said they would like to see a bill passed during a special session next week. “Let’s get it done. Let’s not wait until July,” he said. “This is a crisis for many West Virginians.”

Red and blue states have already enacted holidays. In order, they are: Maryland, Georgia, Connecticut, New York and Florida. Kiplinger reports that Colorado, Illinois and Kentucky all suspended gas tax hikes, set to take effect July 1. Other states are still considering various measures.

Noting GOP objections to enacting a holiday here, Baldwin said, “I honestly did not think this would be a partisan thing.”

Delegate John Doyle, D-Jefferson, weighed some of the advantages of each proposal. A rebate, he said, would go exclusively to West Virginians. The gas tax suspension would also benefit drivers coming into the state and help tourism.

Doyle said he leans toward the suspension. Others noted that the suspension offers immediate relief while a rebate delays putting money into pockets.

Spokeswomen for the House speaker and Senate president said in an email exchange that their positions haven’t changed since their joint March 18 statement, issued after the Democrats’ first call for a holiday.

They said then, “We completely support tax reductions, but because of decisions we have made as a Legislature, we cannot just pivot and decide we want to press pause on what is bonded revenue. There are a multitude of legal reasons why we cannot simply suspend our gas tax. We cannot — and should not — implement policies like these that sound good, but in reality, would do far more damage to our state in the long term.”

Instead, they favor a proposed Constitutional amendment that would allow the Legislature to end the personal property tax on vehicles and on business inventory, equipment and machinery.

The Dominion Post was also able to reach a couple local GOP legislators who offered their thoughts on a holiday.

Sen. Dave Sypolt, R-Preston, said, “A gas tax holiday would help the consumer very little and be temporary, yet collectively it would be devastating to the highway maintenance program, which is generally underfunded anyway.”

Randy Smith, R-Tucker, said he wants to see specifics of a bill before he decides, and is concerned about how a tax holiday would affect the road fund.

Delegate Guy Ward, R-Marion, said, “Yes, I would support a decrease in the motor vehicle fuel tax. We’re looking at over a billion-dollar surplus and one month’s tax on fuel is equal to about $35 million. We should be able to cover this cost on our road bonds for quite a while.”

He continued, siting a Forbes opinion piece on gas prices, “Hopefully, the Biden administration will come to their senses soon and call on American energy companies to invest in domestic production and put U.S. workers back in the field where they belong. America has plenty of oil to keep prices at the pump low and the nation secure.”

Sen. Charles Clements, R-Wetzel, questioned the benefits of a holiday. A person who travels 1,000 in a 22 mpg car would save $16; 2,000 miles, $32.

“While the savings to the individual would be minimal, depending on the month, the highway fund would lose approximately $40 million. We also have no guarantee that the marketers would pass the full reduction on to the public,” he said.

He asks how long the holiday would last and how the lost tax revenue would be replaced. Would it create more demand and cause a rise in prices?

“The answer to high fuel prices is to increase the supply or reduce demand,” he said. “This spike in fuel prices is coming at a time that we want to travel which makes the issue more painful. Washington has the ability to increase supply by examining their policies toward the oil industry; we, the public have the ability to affect demand.”

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