Friday, May 25, 2007

Daniels Refuses to Suspend Gas Tax

Well, folks, with gas at an all-time high, you would hope that somebody in our government would do something to ease the pain. Unfortunately, it won't be Gov. Daniels (surprise, surprise). According to the Indianapolis Star, Daniels doesn't think it would be "an effective or responsible thing to do." Read the article:
Gov. Mitch Daniels says record prices at the pump have not changed his mind about suspending the state’s 6-cent sales tax on gasoline, but his administration is trying to determine whether he could do that even if he wanted to.

Mark Massa, Daniels’ general counsel, said today that his legal interpretation of a 1981 law that former Gov. Frank O’Bannon used to temporarily suspend the tax in 2000 would not allow Daniels to do the same.
But the administration is researching whether a threshold for declaring an “energy emergency” under that 1981 law is being met now, and it has asked the attorney general’s office for a legal opinion on whether a governor can suspend the gas sales tax under that law.

“We want to find out what the options are first,” said Daniels’ spokeswoman Jane Jankowski.

The steps follow the latest round of requests for the Republican governor to temporarily suspend the tax. Some lawmakers made the same request when prices spiked in summer 2005 and last summer.

The average price for a gallon of regular unleaded in Indiana hit a record $3.348 on Monday, according to AAA Hoosier Motor Club. Former U.S. Rep. Jill Long Thompson, who plans to announce her intentions to seek the Democratic nomination for governor this summer, issued a news release Monday asking Daniels to suspend the tax.

Indiana House Speaker Pat Bauer, D-South Bend, sent Daniels a letter Tuesday asking him to do the same.

“Once again, the state’s treasury is gaining from the pain faced by families in Indiana, thanks to the windfall from the sales tax that is being added on top of the exorbitant prices charged to motorists in our state,” Bauer wrote.

Daniels said Monday that he would “never say never” to the possibility of suspending the tax, which would save motorists about 16 cents per gallon if the price was $3.

But he said right now it would not be an effective or responsible thing to do, in part because he was still trying to restore the fiscal strength of state government and suspending the tax would be a step backward. He also said the tax relief would fall on the rich and poor alike, and he knows no way to target the relief to those who need it most.

O’Bannon suspended the tax in July 2000 when gasoline prices hit about $1.80 per gallon, which was considered expensive then. Republicans claimed it was an election-year ploy, but O’Bannon said it was needed to help working families and keep Indiana businesses competitive.

O’Bannon extended the initial 60-day suspension into September, then lifted it.

He relied on the 1981 state law that allows a governor to declare an energy emergency. That’s defined as an “existing or projected shortfall of at least 8 percent of motor fuel or other energy sources that threatens to seriously disrupt energy supplies or diminish energy supplies to the extent that life, health or property may be jeopardized.”

The law says if that threshold is met and an emergency declared, the governor can implement programs, controls, quotas or curtailments to affect the conservation or consumption of energy. O’Bannon relied on language that said a governor also could “suspend the provisions of any state statute regulating transportation ....”

When O’Bannon suspended the tax, his deputy press secretary — Cheryl Reed — acknowledged that the emergency order had never been used and therefore had not been interpreted by the courts. But she said the governor’s legal staff had thoroughly reviewed the law and believed the action was proper.

She said according to the Federal Energy Information Administration, which monitors gasoline inventories, those in the Midwest were 13 percent below the five-year average for that time of year — and the administration was satisfied that the 8 percent shortfall threshold had been met.

At the time, then Senate Finance Chairman Larry Borst, R-Greenwood, suggested that O’Bannon was skirting the law. He said the Legislature enacted it in 1981 because the state was running out of fuel at the time and it was felt that a governor should have some emergency powers to order conservation.

“There was never anything in there about prices,” Borst said then.

Massa said in his legal judgment, the law’s provision allowing a governor to suspend any state statute regulating transportation “doesn’t give you authority to waive a tax statute.” But he said the administration still wants further legal guidance from the attorney general’s office.

This is the same governor who closed half the license branches in the state, sold the Indiana toll road to a foreign company, rammed Daylight Savings time down our throats, and on and on. Oh, wait a minute...losing the sales tax would cost the state money. That's all Daniels has thought about since the beginning. He said during his campaign that he would run the state like a business...yeah, he being the CEO and the rest of us peons to make money for the state, while he rides around in a state-sponsored RV, paid for and fueled with state money. All the while, the rest of us have to suffer. He is really one to talk about "effective and responsible" actions. The only things Daniels sees as responsible are actions that bring in money to the state treasury.

Frank O'Bannon, rest his soul, went out on a limb when he suspended the tax. Maybe the words "excessive prices" weren't there, but Frank did the right thing because he cared about working Hoosiers. To paraphrase Daniels' quote, Frank thought it was "the effective and responsible thing to do" because he was concerned about us...he put our needs above the needs of the state. That's what a governor should do...govern the state and his constituents, not act like a CEO giving orders to his workers. Frank had a heart...Daniels does not.

It's time to do the "effective and responsible thing". Governor Daniels should suspend the 6% sales tax, at least temporarily. He should give us a chance to breathe a bit easier, because we are all suffering from this.

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