Yearlong fuel tax break ends Sept. 1

8-cents-per-gallon break cost the state as much as $45 million

Posted: Friday, August 14, 2009

FAIRBANKS - Alaskans will pay more for gas next month when a yearlong suspension of an 8-cents-per-gallon tax break ends.

Gov. Sean Parnell had urged the Legislature to extend the fuel tax break during Monday's one-day special session, but lawmakers declined.

The break applied to gasoline, diesel, marine fuel and aviation fuel. State Revenue Commissioner Pat Galvin says the one-year suspension, which ends Sept. 1, cost the state between $40 million and $45 million.

"I'm asking the Legislature to join me in this opportunity to help Alaskans at the pump," Parnell said in a press release. "While gas prices have eased somewhat from last year, they're still running well above historic norms. Legislators should expand their call for a special session to either extend the fuel tax suspension or repeal the tax altogether."

As chairman of the House Judiciary Committee, Rep. Jay Ramras, R-Fairbanks, held hearings last fall with refiners, attempting to coax a logical reason for Alaska's fuel prices. His final analysis revealed that refiners are not gouging customers.

He expressed opposition to the tax break, calling it irresponsible and saying it could stop the flow of federal highway dollars to Alaska.

"I am against the suspension of the 8-cent gas tax because I don't believe it found its way into consumers' pockets," Ramras said. "I think it was raked off by the refiners, by the jobbers who delivered the fuel and by the retailers."

He expected consumers will, however, see an 8-cent increase in fuel costs around Sept. 1.

In a House meeting on Tuesday, Parnell said he would continue arguing for the tax suspension, Ramras said.

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