Fuel taxes and fees add to the price of a gallon

BUFFALO, N.Y. (WIVB) – Gas prices in the Buffalo-Niagara region have been hovering around $2.30 per gallon.

That’s not bad at all when you think back to July 2008 when prices were over $4.00 per gallon.

But even with cheaper gas there’s still a price to be paid in taxes and fees.

“We’ve got the seven deadly government taxes. Seven of them on a gallon of gas,” said Erie County Comptroller Stefan Mychajliw, who emphasized that about 25 percent of the cost of a gallon of gas is taxes and fees.

“Taxpayers are getting hosed, pure and simple,” he said

Mychajliw’s office released a report on motor fuel taxes back in January 2015.

“It’s outrageous, especially in our neck of the woods. On average it’s 60 cents or more per gallon, that’s taxes,” Mychajliw told News 4 recently.

And that’s not all.

The Comptroller’s study found that federal, state and local charges “create a complicated formula” for motorists.

“We actually found, because of our study, that the county is taxing taxes on a gallon of gas. It’s outrageous. We’re actually basing the percentage of a sales tax on the tax of a gallon of gasoline,” he said.

Mychajliw added an interactive gas tax calculator on the county’s website for motorists. Users just type in the price per gallon and the calculator does the rest.

According to the American Petroleum Institute, total state taxes and fees in New York added up to about 44 cents for each gallon of gas as of April.

“That’s the 4th highest in the country,” said Scott Drenkard, director state projects for the Tax Foundation in Washington.

Add another 18 cents in federal tax, and that gets you to around 62 cents for every gallon.

“If you go to Florida and you see what gas prices are compared to here, I think it is a little too much. I mean 62 cents on a gallon. I think it’s a little ridiculous,” said Williamsville resident Mike Rizzo.

At $2.33 a gallon, about 62 cents goes to a combination of federal, state and local taxes.

A 20 gallon tank of gas would cost motorists around $12.00 just in taxes and fees

“I don’t think people have any real idea of what the breakdown is, but I think people here in New York know that we pay a lot of taxes compared to a lot of other areas across the country,” said Elizabeth Carey, director of public relations for AAA of Western and Central New York.

The average national gas price of $2.23 over the Independence Day weekend was the lowest all year, according to AAA.

But that’s the national average, not the average price here in the Buffalo-Niagara region, where prices were running about 10 cents higher.

“A lot of people will ask why is gas always so much more expensive in New York State compared to that national average, and one of the big reasons is the taxes right here in New York,” Carey said.

Fuel price fluctuations can also be seen within different regions of the state.

“Usually it’s a little bit cheaper in Syracuse as well,” Carey explained. “They have a Costco there and we’re told that the big box retailers really drive down the prices. A lot of times these big box retailers will get in a price bidding war and really that’ll drive down the prices for the consumer. So we see it cheaper in Central New York than in the western end of the state.”

Mike Newman, executive vice president of NOCO Energy Corporation, says distribution and storage costs also impact the price of fuel. But he says ultimately, taxes are a big driver of price.

“I think if the taxes were dedicated to the funds that they were originally created for that would be great because we’d have better roads, better bridges and better infrastructure. But unfortunately they don’t generally do that,” Newman told News 4.

“I think where people get frustrated is they pay this big tax dollar and it just kind of goes in the ether,” he added.

Scott Drenkard says New York actually does better than most states when pairing up road users with the cost of highway upkeep.

“Gas taxes, user fees and user taxes associated with transportation end up covering 68.5 percent of total state and local road spending in New York, Drenkard said. “That’s the third highest in the country, but still not where you’d want to be which is a little bit closer to 100 percent.”

He says the federal gas tax — which has been holding at 18 cents for many years — used to have more purchasing power.

“That’s why when you hear about the transportation trust fund being bankrupt. That’s one of the reasons is that building transportation projects got a little bit more expensive as the purchasing power of the dollar has fallen due to inflation, but the gas tax hasn’t been inflation adjusted at all,” he said.

Prices on July 3, according to AAA

In case you’re wondering, South Carolina at $1.90 per gallon had the lowest average gas price in the nation as of July 3, according to AAA.

Alabama, Oklahoma and Mississippi were all selling regular unleaded below $2.00 per gallon during the same time period, AAA reported.


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