Archive for Saturday, September 16, 2006

Committee proposes gas tax ‘buffer’

Rate would be 1 cent less than neighboring states

September 16, 2006

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— A proposal to create a tax buffer zone along Kansas' borders with other states drew praise from the owner of a gasoline station and strong objections from some state officials concerned about losing tax revenue.

The Legislature's Joint Tax Committee heard testimony Thursday on creating the buffer zone and tying the Kansas gas tax to gas taxes in Oklahoma, Missouri, Nebraska and Colorado. The Kansas gas tax rate is higher than all those states except Nebraska.

Under a bill in the last legislative session, which was eventually deferred to the interim committee, the buffer would extend 3,000 feet inside the Kansas border or within the city limits of a border city. The Kansas tax rate would be 1 cent per gallon higher than the neighboring state's rate.

The current Kansas tax on gasoline is 25 cents per gallon. Rates in neighboring states are: Nebraska, 28 cents; Colorado, 22 cents; Missouri, 17.6 cents; and Oklahoma, 17 cents. The U.S. average state tax on gasoline is 28.4 cents. The federal government adds an 18.4 cent tax.

Mark Hurlbutt told the committee that his retail gasoline business in the southeast Kansas border city of Coffeyville is hurt because motorists drive one-half mile into Oklahoma to avoid paying an extra 8 cents per gallon in Kansas gas tax.

"It is so frustrating to go by these Oklahoma stores in South Coffeyville and see the cars lined up on both sides of the pumps clear back out into the street," he said.

But the committee also heard from some state officials that the proposal is bad public policy and would cost the state millions of dollars in tax revenue.

Pat Hurley, who represents the influential highway construction lobbying organization Economic Lifelines, said any measure that cuts Kansas' motor fuel tax revenue and decreases funding available to the Kansas Department of Transportation for road projects "while well intentioned, would have a detrimental impact."

And in testimony prepared for the joint committee, Richard Cram, the Kansas Department of Transportation's director of policy and research, said financial and constitutional issues make the proposal unreasonable.

Cram said the buffer zone created by the proposal would contain about 17 percent of the state's population, much of that on the northeast Kansas-Missouri border. If adopted, a 17 percent reduction in fuel tax receipts would cost the state $13.4 million on gasoline sales and $5.4 million on diesel sales. Of that total, he said, $12.5 million would have go to the state's highway construction fund.

"While stations within the designated border area may see some increased fuel sales, Kansas stations outside the area will undoubtedly see declining sales and will be hurt by this proposal," Cram said.

Tom Palace, executive director of the Petroleum Markets and Convenience Store Association in Kansas, said the industry group was officially neutral on the tax buffer zone idea.

"We are taking a neutral position because there are members who want the reduction of the excise tax on the border, and there are members that feel we are creating a problem for other marketers who would find themselves competing with another Kansas retailer," he said.

One solution to the problem would be to simply cut gasoline taxes in Kansas, he said.

The committee is expected to forward recommendations to the 2007 Legislature, which convenes in January.

Comments

KS 10 years, 7 months ago

I find it very interesting that all the liberals in this town have no problem posting on issues that involve bashing Bush, smoking ordiances, etc., but when it comes time to think about a possible tax reduction...........SILENCE!

It does appear the local merchants don't have a level playing field. I guess if anything is done, it would be my position to lower the Kansas tax to the same level as the state the border town is adjacent to.

Unfortunately, I believe that way too much of our road fuel taxes are NOT being used for road upkeep. Too much goes into the general fund which ends up funding other programs, etc. Use the tax for it's intended purposes. Having said all of that, I do believe that Kansas is on top of the eight ball when it comes to rebuilding our highways. Can't say that about some others.

Sigmund 10 years, 7 months ago

'One solution to the problem would be to simply cut gasoline taxes in Kansas, he said.' Never happen.

bugmenot 10 years, 7 months ago

"I find it very interesting that all the liberals in this town have no problem posting on issues that involve bashing Bush, smoking ordiances, etc., but when it comes time to think about a possible tax reduction...........SILENCE!"

And I find it funny that Republicans praise smaller governments and less intrusion on our lives. Guess what, government is bigger than ever and god forbid gays marry, lets ban violent video games, ban gay sex, ban abortions.

dizzy_from_your_spin 10 years, 7 months ago

If a buffer were implemented, wouldn't the areas bordering the areas with the tax buffer also then suffer?

It should be all or none. If the tax is lowered it should apply state wide.

bmwjhawk 10 years, 7 months ago

It's more funny to note that the bulk of people don't post during the weekends, prompting one to wonder how much work is actually getting done during the weekdays.

This would probably be a 60-75 response article if published on a Tuesday.

gr 10 years, 7 months ago

"If a buffer were implemented, wouldn't the areas bordering the areas with the tax buffer also then suffer?"

Simple - you'd create another buffer zone! Each buffer is one cent higher. Eventually, at the center of the state, it would be the regular rate.

Maybe they could confuse the issue and make it work like the internet tax. All the gas stations along the border in other states would ask their customers where they live and then compute sales tax and send it to Kansas.

For whatever reason, Kansas has chosen to penalize people for buying gas in state. Oklahoma has chosen to reward people (at least penalize less) for buying gas in their state. If Kansas does not want people to buy gas here, then it's working for the border towns. The retailers need to lobby for Kansas not to be so hostile. Otherwise, people will take their business elsewhere.

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