Gas prices: An inside look at NY's taxes

ALBANY – Gas prices across the nation have fallen to their lowest point in years, but New Yorkers still pay the most in the contiguous United States.

The main reason is New York has as many as seven different state taxes that add up to 45 cents per gallon, as well as a 19-cent per gallon in federal taxes for putting New York in the unenviable position.

The average price of unleaded regular in New York on Wednesday was $2.70 a gallon, compared to a national average of $2.19 a gallon. Only Hawaii and Alaska have higher prices.

"I don't think the average New Yorker has any clue how much they pay in taxes when they pull up to the pump," said John Corlett, legislative chairman for AAA New York.

New Yorkers pay about 64 cents per gallon in taxes, the most of any state, AAA estimated. The national average is 49.28 cents, according to the American Petroleum Institute.

The breakdown according to AAA, as of Jan. 1:

NYS Excise Tax: 8 cents

NYS Petroleum Business Tax: 17.8 cents

NYS Fuel Quality Testing Tax: .05 cents

NYS Oil Spill Fund: .0196 cents

State Sales Tax: 8 cents

The Metropolitan Commuter Transportation District -- including NYC and the Hudson Valley --surcharge: .75 cents

Local Sales Tax: 10.88 cents (The estimated sales tax would vary based on the pump price and county of sale)

Total State Taxes: 45.49 cents

Federal Taxes: 18.63 cents

Federal and State Tax Combined: 64.12 cents

Western New York has the highest gas prices in the state—and thus the continental U.S., the Democrat and Chronicle reported.

Critics said the bigger problem in New York is that the revenue from the gas taxes doesn't end up where it's supposed to.

Only 22 percent of the $3.8 billion collected from highway taxes and fees each year goes to capital road projects, and the rest is diverted to cover state operating costs, mainly debt payments, a report in February from the state Comptroller's Office found.

In 1991, New York established the Dedicated Highway and Bridge Trust Fund to collect fees and taxes to pay for road repairs. But the fund is always raided, leaving critical highway and bridge projects unfunded, Comptroller Thomas DiNapoli said.

Business groups said that if the state is going to hit drivers with high taxes, the money should at least go to infrastructure needs. DiNapoli estimated in 2012 that New York faces a shortfall of up to $89 billion in funding for water, sewer and transportation projects over the next two decades.

"If you're going to charge us the tax, then at least put the tax to work on what you intended it to do, so we can have better roads and bridges," Brian Sampson, president of the state chapter of the Associated Builders and Contractors.

On Wednesday, AAA reported the average price for unleaded regular was $2.78 a gallon in the Rochester and Buffalo areas, compared to $2.74 in New York City, $2.66 in the Albany area and $2.57 in the Binghamton area.

It was $2.19 per gallon in neighboring New Jersey, $2.49 in Pennsylvania and $2.57 in Connecticut.

When gas prices soared in 2011, state lawmakers sought to cap New York's gas taxes.

Since 2006, the state has capped its taxes on gasoline at $2 a gallon. So anything above $2 per gallon is not subject to the state's 4 percent sales tax, or a total of 8 cents that is collected.

Counties also have the option of capping its taxes on gasoline, but few do and most use a four percent sales-tax rate. So the higher the gas price, the more revenue counties and other local governments collect.

Higher gas taxes makes New York less competitive with other states, some lawmakers said. New York is already labeled by the Tax Foundation, a conservative Washington D.C. group, as being among the highest taxed, less competitive states in the country.

Assemblyman James Tedisco, R-Schenectady, said the state should revisit its gas-tax structure and at least put more of the money to infrastructure needs. New York has $5 billion in bank settlements this year, and a bulk of the money is expected to go to road and bridge needs.

"Reducing the gasoline tax should still be on the radar because that's part of us making the worst business-friendly state in the nation," he said.

JSPECTOR@Gannett.com

www.twitter.com/gannettalbany

Below is a breakdown of the gasoline taxes in New York,. The estimated sales tax would vary based on the pump price and county of sale.

NYS Excise Tax: 8 cents

NYS Petroleum Business Tax: 17.8 cents

NYS Fuel Quality Testing Tax: .05 cents

NYS Oil Spill Fund: .0196 cents

State Sales Tax: 8 cents

The Metropolitan Commuter Transportation District -- including NYC and the Hudson Valley --surcharge: .75 cents

Local Sales Tax: 10.88 cents

Total State Taxes: 45.49 cents

Federal Taxes: 18.63 cents

Federal and State Tax Combined: 64.12 cents