Parnell's gas tax suspension faces legislative opposition

Posted: Wednesday, January 26, 2011

Legislators appear reluctant to go along with Gov. Sean Parnell’s proposal to suspend the state gasoline tax, despite having overwhelmingly supported a similar measure from former Gov. Sarah Palin three years ago.

The difference now may be that soaring oil prices haven’t given the state the huge surpluses it enjoyed then, and prices at the pump aren’t as high either.

Top leaders in the House and Senate say Parnell’s proposal is unlikely to go anywhere.

“I haven’t seen movement from anyone in the Senate to follow the governor’s lead on that,” said Sen. President Gary Stevens, R-Kodiak.

House Speaker Mike Chenault, R-Nikiski, said he opposed suspending the tax.

“I personally think it needs to stay in effect,” he said.

Alaska’s roads need the money it provides, Chenault said.

“That is a tax that puts money into roads, about $30-$40 million into roads, and Alaskans are down here from every part of the state wanting their roads fixed,” he said.

Some legislators doubted if they suspended the 8 cent per gallon tax the reduction would be passed on to drivers.

“Personally I don’t like paying high gas prices, none of us do, I just don’t think this will come back to the consumer,” said Rep. Beth Kerttula, D-Juneau, House Democratic Leader.

Sen. Kevin Meyer, R-Anchorage, the Senate’s Majority Leader, made similar comments.

Even though prices immediately dropped 8 cents during a one-year suspension of the tax during the Palin administration, it wasn’t clear the gasoline retailers weren’t just pocketing the decrease, he said.

“It got kind of blurry about whether the citizens were still getting the 8 cent reduction,” he said.

Kerttula said while investigations by the Attorney General’s Offices failed to prove anti-competitive practices “there was seemingly some kind of collusion” to raise prices.

House Majority Leader Alan Austerman, R-Kodiak, said the tax should be retained so the money could be spend on the state’s transportation needs.

Parnell is proposing to borrow money to balance the budget “and yet he wants to cut $30-$40 million in tax that needs to go into the road system out there,” he said.

Meyer noted when the tax has been suspended under Palin, something he supported, the state had a huge surplus.

Rep. Lindsey Holmes, D-Anchorage, said that the state’s gas tax is already the lowest in the nation, yet prices remain high.

“Eight cents a gallon is not the problem,” she said.

• Contact reporter Pat Forgey at 523-2250 or

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