EDITORIAL: Governments prove they can live with less tax revenue

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PHOTOGRAPHER:

When individuals or families experience a loss of income they learn to adjust their spending habits and expectations.

They drive less, cut the thermostat at night, shop more efficiently for bargains and sales, and put off purchases of new vehicles or home improvements. They do what they can to cope.

Governments, it turns out, can do the same thing. During the pandemic, Saratoga and Schenectady counties gave residents a break from their financial hardships by capping the local share of taxes they collect from the sale of gasoline — only taxing the first $2 of a gallon of gas.

For drivers who got used to paying between $4 and $5 a gallon, it resulted in significant savings, which came at a time of super-high inflation.

The suspension of the gas tax also deprived the counties of revenue they could have collected had they charged the tax on the full amount.

Yet the county governments have continued to function without the tax revenue. In fact, Schenectady County expects an increase in sales tax revenue will help offset the loss.

Same thing with the state, which temporarily cut its share of the gas tax by about 17 cents a gallon. The state still appears to be functioning.

Unfortunately for motorists who commute to work and travel for business and pleasure, that fiscal relief may be about to end.

Schenectady County’s suspension of the tax is scheduled to end at the end of February, while the relief in Saratoga County and the state is scheduled to sunset at the end of this month.

What this experiment demonstrates is that government may not need to be burdening taxpayers as much as it has been. If officials can run fully functioning governments without the full revenue from the gas tax, then maybe they don’t need it all.

With that realization, those governments should consider granting an extension on the tax suspension for a while longer, maybe six months to start. Or they might consider some kind of hybrid plan, which sets the gas tax on a sliding scale based on how high gas prices rise in the future, as state Sen. Jim Tedisco has proposed.  They could consider lowering the regular tax on a full gallon. Or they could altogether end the local share of the tax above $2 a gallon.

It’s said that once government imposes a tax, that tax becomes permanent. But in these cases, when a national health emergency compelled some governments to withdraw a tax, they managed to make due with less revenue.

It’s a lesson for not only these local counties, but one for other counties and the state to follow.

New Yorkers are among the highest taxed residents in the country. Suspending, lowering or eliminating the gas tax would go a long way toward easing that burden.

Categories: Editorial, Opinion

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