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Gas tax under fire from Parnell Legislators want other taxes cut, appear reluctant on motor fuels tax

Posted: March 21, 2012 - 12:02am

Legislators are preparing to consider Gov. Sean Parnell’s proposal to suspend the state’s gasoline tax, but there are new indications the tax cut may have difficulty making it through the Legislature.

While Parnell has feuded with the Senate over oil taxes, the gasoline tax may have as much difficulty in the House of Representatives, comments from leaders this week suggested.

“For us to either drop or reduce our 8 cents a gallon tax certainly send a bad message to the federal government,” said House Speaker Mike Chenault, R-Nikiski, otherwise and ally of Parnell on taxes.

Alaska’s gas tax is the lowest in the nation, and the state’s legislators have said that if Alaska doesn’t have a gas tax it would harm their efforts at getting federal transportation dollars for Alaska.

After Parnell made a renewed push for suspension of the tax, Transportation Committee leaders in the House and Senate said they’d give the bills doing that a hearing.

House Transportation Committee Chair Peggy Wilson, R-Wrangell, has scheduled a hearing on the bill for Thursday where the administration can make its case.

Senate Transportation Committee Chair Albert Kookesh, D-Angoon, will likely schedule a hearing late next week, his staff said.

The 8 cents per gallon savings under Parnell’s proposal would be for highway fuel. For marine fuel the savings would be 5 cents per gallon, and for aviation fuel it would be 4.7 cents per gallons.

The Parnell administration disputes the claim that suspending the gas tax would impact funding, telling legislators that Alaska has no dedicated highway fund and the motor fuel proceeds go into the state’s general fund. Suspending the tax would save Alaskans $35-40 million a year, the administration said.

Parnell said the state already invests substantial money in transportation, with a $585 million transportation operating budget, $328 million of which comes from the general fund. Additional money for capital projects is also spent.

Rep. Lance Pruitt, R-Anchorage, said Alaskans would benefit more if the money were spent on the state’s roads.

Do we save Alaskans money at the pump “and them have them drive on roads where their car could get beaten up and it would cost them more to repair it, or do we repair our roads,” Pruitt said.

Rep. Berta Gardner, D-Anchorage, said she doubted that Alaskans would see the benefits from a gas tax reduction.

Under former Gov. Sarah Palin the tax was suspended for a time, and she said drivers didn’t benefit.

“What we found last time it was not passed along to consumers,” she said.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.

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