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Our Views: Double whammy

State gas tax hike triggered by pump prices is a painful combo for drivers

POSTED: May 8, 2011 1:00 a.m.

It's a look we see in the faces of others, likely reflected back to them by our own.

An expression of shock, dismay and disbelief as we peek up at the gas pump to see the total damage after we fill out cars. "That much?" we say to ourselves as we put the pump nozzle back.

Yes, that much. Again. And for Georgians, it just got a little worse.

Two years ago, Americans endured gasoline prices of more than $4 a gallon. We in Georgia had a second spike and a brief, if somewhat imagined, shortage after a Gulf Coast hurricane briefly interrupted supplies.

For a while, we all conserved, cutting back on trips, car-pooling more often and taking whatever steps we could to save a few drops of precious fuel. Many people even began trading in their gas-sucking SUVs for more efficient commuter cars and hybrids.

But as often is the case, when prices fell back to normal levels in the mid $2 range, all of those saving efforts went away as well.

Now crude oil prices have again spiked, largely sparked by political and social unrest in many Middle East countries that siphon the stuff out of the ground. As a result, pump prices are back near $4 a gallon and may go higher as the summer vacation season approaches.

We all know the pain we feel when we fill our tanks with such pricey fluid, but it also hits us in other ways. Businesses that rely on transporting goods must pay more, and those prices get passed along to us in the cost of goods and services. Whether it's a taxicab ride, pizza delivery or many of the goods we buy at the supermarket, all costs are affected by the high price of toting things and people around.

Economic reports out recently showed that consumer spending was up in March, but only because Americans were paying more for gasoline and its residual effects. In other words, few industries were benefiting greatly from this spending spree, beyond the fuel producers whose profits rose during this time.

Now in the midst of this, Georgians this past week found themselves paying even more when the state gasoline tax jumped another 3 to 5 cents a gallon. This rise was triggered by the spike in gasoline prices, which by state law kicks in when the average rises above a certain level.

The percentage of tax the state charges is based on the average price per gallon and refigured every six months. Normally, the price change is minimal and the change in the tax is a fraction of a penny and barely noticeable. But when the prices spike, as they have this year, the tax jumps. If the price goes down, so will the tax.

When prices rose sharply two years ago as a result of Gulf Coast hurricanes, then-Gov. Sonny Perdue suspended the tax bump. But Gov. Nathan Deal chose not to this time, deferring to the state legislature to change the law rather than continuing to suspend it whenever it is enacted. Because the rise in prices has occurred in the normal give-and-take of the market and not because of a disaster or supply interruption, the governor is deciding to let it play out.

And while we don't like paying more and are inclined to gripe, keep in mind that Georgia's overall gas tax ranks well below the national average. And it also is the third leading source of revenue for the state, helping pay for roads and transportation needs.

But with the extra fuel costs already imbedded in nearly everything we pay for, Georgians will be suffering a death by a thousand cuts as long as both prices and taxes keep going up. The money we keep sinking into our gas tanks is money that could be spent helping other local businesses or paying down our own personal debts.

It's not like most of us have alternatives to get to work or do our jobs; only those in urban areas have a clear option of public transportation, and that is limited based on your work locale and what you do for a living. For the most part, money we spend on gasoline is not discretionary; we have to get around. But that leaves less to spend at the coffee shop, grocery store or other retailers that could use a little help right now.

And there is another factor to consider: Next year, Georgians will be voting to approve a regional sales tax to improve transportation in their communities. As long as gasoline prices and taxes remain high, fewer voters may be inclined to add to their burden with an extra penny, even if it goes to a needed expense. There is just so much people are willing to pay, and that limit has already been reached in the minds of many.

We agree that the governor has no real basis to suspend the rise in the gas tax this time, short of a major crisis. But it is an issue the legislature should be willing to address in next year's session. Gas taxes shouldn't go up and down with the times; if they need to be raised on a permanent basis to pay for state needs, fine. Just keep them there and don't make drivers shell out more and more as the scale slides upward.

Meanwhile, vacation plans already are changing and driving habits are being altered in the short term as we try to deal with the impact of our pump pain. That will have to do for now until we find out when prices may stabilize and we can adjust for the long haul.



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