View of the prices of gas at a Shell gas station...

View of the prices of gas at a Shell gas station on Friday 2022, in New York.  Credit: AP/Brittainy Newman

ALBANY — Could a push to suspend New York’s gasoline tax morph into a one-time gas rebate check for automobile owners?

It’s an idea under discussion as lawmakers near a deadline for adopting a state budget, several sources said.

Some lawmakers said they would be open to sending gasoline rebate checks to New Yorkers if a suspension of the state’s high gas tax proves too complicated because of the way the tax is imposed and collected. If so, New York would be pursuing a similar rebate proposal made by California leaders.

“I think it could fly and it should be proposed,” Assemb. Steven Englebright (D-Setauket) said of the gasoline rebate, calling it perhaps a better way to provide tax relief to drivers.

“We need to send a signal that we understand and empathize with people,” he said.

“I would support a temporary suspension of the state gas tax or similar relief, such as a rebate,” said Assemb. Fred Thiele (I-Sag Harbor).

Not everyone is sold on the idea.

 "As usual, the Democrats in Albany take a simple idea and want to turn it into a convoluted and inefficient scheme, " said Sen. Phil Boyle (R-Bay Shore). "Temporarily suspending the state's gasoline tax would immediately help millions of New Yorkers suffering from record high gas prices. And that is exactly what we should do."

But officials note that a suspension isn't without complications, too.

State taxes on gasoline run 33.5 cents per gallon; counties also apply local sales taxes, typically 4%. At $5 per gallon, the suspending state and local taxes would save about 54 cents per gallon.

The tax is prepaid by wholesalers and distributors, often in quarterly installments, then passed on to gas stations and then added to the price you see at the pump.

Further, revenue from the tax is earmarked for infrastructure projects. And county legislatures also would have to forgo a considerable source of revenue.

So while a suspension would be easy for customers, it would require some lead time and big adjustments for the industry and perhaps force the state to shift money from other funds to cover infrastructure.

Gov. Kathy Hochul’s administration has considered the possibility of pursuing a one-time gasoline rebate for automobile owners, which could be included in the state budget, several sources said. It would involve sending checks, worth several hundred dollars, to vehicle owners.

This would mirror a proposal that’s gained traction in California. Lawmakers there are proposing sending each car owner a $400 check to help defray the rising gasoline costs; a household would be capped at $800.

Asked Friday about the possibility of a tax suspension or rebate being approved in the state budget, Hochul said only: "It's on the table. We're having these conversations."

A source said momentum was shifting back to a suspension as budget talks headed into the weekend. 

In New York, the Democratic-led State Senate has proposed suspending the gasoline tax from May 1 to Dec. 31. The Democratic-dominated Assembly and Hochul, also a Democrat, haven’t gotten behind the idea yet.

One source said the administration was working on potential rebate language. But another said the rebate idea might have peaked and faded because legislators believe a suspension is more straightforward.

Some legislators say they are for whatever eases taxpayers’ burden.

"If administered properly, a rebate could be more impactful," Assemb. Edward Ra (R-Franklin Square) said. "It could be a little cleaner way to do it, if you look at it from the perspective of: the state's doing well now, you could do the rebate and not have to shift money around" to cover infrastructure costs.

He added: "People aren't going to want to shortchange funds that go into roads."

Sen. James Gaughran (D-Northport), referring to the rebate idea, said, “That hasn’t been formally presented to us yet but I’m for whatever we need to get across the finish line to give some relief to anyone who drives. Either way could work.”

With Michael Gormley

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